Why Renting May Be Best for You
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Everyone you know seems to be buying property but you are still renting. This actually might be more beneficial to you in the long run and here’s why.
Suze Orman has a few reasons why you might want to stick to renting property.
You might want to move to a new place in four years. If you rent, it’s just a simple case of looking for a new rental property and moving.
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For a buyer, it could be a long process with the selling of your home and securing a new one, including the financial costs of buying and selling property.
“Please do not think of renting as ‘throwing money away,'” Orman said. “For some people, it can make great sense to rent.”
Having enough money to put down a deposit on a rental property can be a challenge in itself.
If you are looking at wanting to buy, you would be realistically looking at a deposit of at least 20% of the property’s value.
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“My rule of thumb is that these extra costs of homeownership can add 30% to your base mortgage amount,” Orman adds. “So if the mortgage is $1,500 a month, your total housing costs might be around $1,950.”
You might think that not having a landlord is a great thing, being able to do as you please with your property. But being a homeowner does come with extra costs.
For example, you would need to pay for upkeep on the property, and also property tax and home insurance would be greater.
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