The Advantages of Renting

Most people are under the assumption that renting is in essence, throwing away money. This belief was developed because renters do not obtain ownership of the property. Despite the fact that an individual leasing an apartment may pay months or years of payments without gaining ownership of the property, the following article serves as a counter-argument toward the idea that “renting is always throwing away money.”

Lack of ownership should not insinuate that a renter is throwing their money away. In fact, renting has a variety of benefits:

  1. A commonly known benefit to renting is that the monthly rent can be cheaper than monthly payments on a house. It is also important to understand the breakdown of a house payment. For example, an individual may only pay $600/month for their mortgage payment, but how much of that is going toward interest? The answer in this example, $360 which means only $240/month is going toward the principal (or borrowed money) of the mortgage. In this example, an individual would be paying $4,320 a year in interest alone.

  2. Renting does not require an individual to pay property tax. According to, the average American household spent $2,197 on property taxes in February 2018. As this is an average, property taxes could be lower or higher depending on where an individual lives.

  3. Renters insurance is less expensive than homeowners insurance. For example, according to the average U.S. renters insurance in November 2017 was $197/year while the average U.S. homeowners insurance found in March 2018 for a $200,000 dwelling with $1,000 deductible and $300,000 liability coverage was $1,244/year.

  4. Utilities can be less expensive in an apartment. This may be influenced by several things, for example, some of the utilities may be included in your cost of rent or the space you are paying to heat or cool in the apartment is smaller than the space in the house.

  5. In addition, most rental properties are under a maintenance plan, which in laymen’s terms means that the renter is not responsible to pay for the maintenance expenses. Here are a few common maintenance expenses a homeowner may have to pay that a renter would not have to pay.

    1. A roof replacement can easily cost $10,000 – $20,000.

    2. A heating and cooling unit can easily range from $3,500 to $7,500.

    3. Carpet replacement can cost $5,000 – $10,000 depending on the square footage being carpeted.

    4. Finally, while those are some of the larger expenses, there are several smaller costs that add up such as spraying pesticides, mowing, purchasing equipment, etc.

  6. One last renter’s perk that I will discuss is the flexibility of moving under a renters contract. Because individuals can rent month-to-month, they have the capacity to move to a new city or country once the lease agreement ends fairly easily. Whereas, if someone were to purchase a house, a move may be much more difficult within a short time period.

Overall, simply because a person chooses to rent does not mean that they have chosen to throw their money down the drain. Rather, the decision to rent factors in various things such as how long the renter intends on living there, the local price-to-rent ratio, alternative investment options, maintenance expenses, insurance expenses, property tax expenses, etc. To rent or to buy is contingent on an individual’s circumstances.  If you are contemplating renting vs. buying a house, check out for further details.