Should I buy a house or rent? This question has vexed people in the housing market for years, but new reports show that the answer for many is changing. In the past buying a home was seen as the only option for most people seeking housing. However, the increased flexibility and simplicity of renting a house has made it more popular in recent years. This is a great time to be a property owner, as renting is only becoming more popular and acceptable.
Why People Choose to Rent
There are plenty of reasons more people are becoming tenants rather than homeowners. For first-time buyers, the barriers to entry for buying a home are bigger than they have been in many years.
After the housing crisis, the real estate market rebounded quickly, but wages and job creation bounced back slower. This created a gap between the cost of housing and the ability of new homeowners to afford it. The result is clear: according to the U.S. Census Bureau, only about 36 percent of people under 35 are homeowners.
In contrast to buying a home, renting has several advantages to these younger buyers. These advantages include:
- Rentals are more affordable than up-front home costs: Compared to down payments, closing costs, and mortgage, insurance, and tax payments, a rental home is a more affordable option with a lower barrier to entry.
- Rental homes are more flexible: Buying a home is a serious commitment to an area and a lifestyle that many young or first-time home buyers aren’t willing to make. Rental homes allow them to live in comfort without the obligation of a mortgage.
- Tenants have fewer responsibilities: Compared to being a homeowner, it’s much simpler to rent a home. Home owners have to pay for maintenance costs, home insurance, property taxes, and more. Plus, the labor and time involved with home upkeep can be a major commitment. In contrast, renting allows tenants to pass most of those time and financial obligations off to the property manager or landlord.
- Rentals often include utility expenses: In many cases, landlords choose to include some low-cost utilities such as water or gas in the rent. This simplifies the bill-paying process for the tenant each month and could also save them money on their utility bills.
- Rentals don’t carry equity: This might seem like a reason not to rent a home, but for some the lack of equity in a rental house is a good thing. Because a rental doesn’t carry equity, there’s no chance that a renter will lose their investment. A home that loses value can become an anchor on your credit, but a rental doesn’t affect anything as long as the terms of the lease are met.
- Renting doesn’t have a stigma any more: In the past home rentals were looked at as a less-desirable alternative to buying a home. Today, renting doesn’t carry that negative connotation - many people choose to rent for their own reasons, not just because they can’t afford a home.
The upswing in rentals has also made it a good time to be a property investor or landlord. For many renters, the choice to rent a home is not based just in their finances but in their lifestyle and goals. This gives property owners access to tenants with good credit histories and the ability to care for the property like it’s their own home.
However, being a landlord is not all fun and games. Even with a good tenant, it’s time consuming and stressful to manage a property yourself. Inspections, maintenance, and paperwork can take up much more time than many inexperienced landlords are prepared for. As for property investors with multiple rental homes, trying to manage them all without help is an exercise in futility.
That’s where property management companies can help. At Elite Real Estate, we manage rental homes in Oklahoma City on behalf of landlords and property owners. We collect the rent, handle tenant screenings and placement, market your vacant or soon-to-be vacant properties, and deal with all the maintenance and tenant requests. This gives you time to focus on your other work and enjoy the benefits of property investment without the headaches.
Contact Elite Real Estate today to learn more about our competitive rates and services. It’s never been a better time to be a rental home owner - see why when you work with Elite!