To many people, buying a house is a sign of adulthood, a permanent marker of one's success in the world. The alternative is renting, which is a more temporary arrangement. However, renting a house can in fact be very beneficial, and is in many circumstances a better option. Make sure to weigh the pros and cons of each as you venture out into house-hunting.
Among renters, the prevailing age group is 18 to 34, which makes sense when you consider that this age group is just starting to define their career path and are continuously vying for any promotion that they can get. This results in sometimes drastic changes, such as moving to a different city or even a different country. Rentals are perfect for this age group because they are able to sign a contract for a specific time period and do not have to worry about buying a house and then getting offered a big promotion in another city.
Another advantage of renting is the fact that rentals do not require any form of financing or initial investment. For lower-income families, rentals can be great because they do not necessitate a large down payment. People with bad credit can also benefit from renting, since they may not be able to get a good loan or mortgage. If you can show that you would be able to pay the monthly rent, many landlords will ignore a bad credit score.
Renting is also often cheaper than buying a house. When renting from a landlord, the only expense is your monthly rent and utilities. However, when owning a house, expenses start coming at you from every direction: your mortgage payments, your insurance payments, any maintenance that needs to be done, property taxes, etc. For people trying to save money and less concerned with the long term, renting can be a very good option.
Many realtors say that renting is throwing money away while buying allows you to build wealth. It is true that renting has no return on investment, but the idea that owning a house is guaranteed wealth is also a fallacy. While a house does have a cash value attached to it, many people forget that you have to actually sell the house in order to get the return. With the current market, that return is in more doubt than ever before, with housing prices still fluctuating after the housing bubble burst.
Renting can be a good alternative to buying a new home. Owning a home is definitely not a bad thing; it gives a sense of ownership and permanence to a home for which people are willing to pay a higher price for. However, you should make sure to weigh the options and decide whether renting or buying is best for you at your current stage of life.