This post was updated on 30 August 2016
Renting your home may be a personal choice to give you the freedom to move easily or check out an area before buying. It may be the best option if you have just started a new job and ned to move to a new area quickly. But for many people it is an option taken not through choice but through necessity. Young people, even relatively well-paid couples, continue to find it difficult to afford a property to buy so have no other choice but to rent a home.
But just what are the advantages and disadvantages of renting a home?
Advantages of renting a property
- You don’t have to take on a large debt – this is something many people worry about especially if they do not have a secure job. It can also be difficult to secure a large mortgage in the first place even if you earn enough to cover repayments if your earnings are irregular.
- You have more flexibility to move if you don’t like the home or area because you usually only have to sign a 6-month tenancy agreement, and after the first 6-months you only have to give 1 month’s notice to move out. So there is the freedom to try out different areas and different types of property.
- There is minimal risk to your money – the worst that can happen is that you lose your security deposit.
- You don’t have to buy any furniture or white goods (assuming the property is furnished, which it usually will be as this offers a tax advantage to the landlord)
- You don’t have to worry about the maintenance of the property or any repairs because these are usually the landlord’s responsibility.
Disadvantages of renting your home
- With interest rates on mortgages so low at the moment it is more expensive to rent than to pay the mortgage on a similar property. This means you are missing out on a great investment for the future because even if house values do not rise over the period of a mortgage you would own a significant asset at the end of the mortgage term.
- You cannot re-decorate if you don’t like the current decorations. So if the property is a great size and layout in a good area but has dated patterned wallpaper, old carpets and 1980’s wall tiles in the bathroom then you are stuck with them.
- There is no possibility of increasing your equity in a property if house prices rise.
- Your landlord may not act swiftly to carry out repairs or maintenance so you may, for instance, be left without a working washing machine for several weeks.
- You may love your home and the neighbourhood but have to move out because the landlord terminates your agreement – put simply, you have very little security.
- The landlord can put up the rent once the initial tenancy agreement expires, making it difficult to budget easily.
- You are unlikely to be allowed pets so not great if you are a cat lover.
As with any life choice or situation there will always be advantages and disadvantages and only you will know what is the best option for you. But whatever that is, try to focus on the positives rather than the negatives as both will always be found in every situation.