Among the various benefits of renting a home, there are disadvantages too. Home rental Arizona is favorable if you are planning to move to a different city soon. Therefore, for those working in Arizona for just a few years, the monthly rent cycle offers value for money compared to buying a home.
However, if you did not have plans to relocate soon, or have school going kids, buying or building a home is much more favorable. This post highlights some of the pros and cons of renting a home in Arizona.
What are the Advantages of Renting a Home?
1. Lower Housing cost
When it comes to home rentals in Arizona, the cost is lower than buying a home in Arizona. Therefore, if you cannot afford the 20% down payment, the closing price, and a steady income source to finance homeownership, renting a home becomes the immediate alternative. Apart from the down payment, closing costs, and high mortgage interest rates, homeownership comes with substantial property maintenance expenses. You need to save beyond the mortgage repayments to keep the property well maintained.
Generally, renting a home in Arizona is the best alternative if you do not have a massive savings to finance a home mortgage, down payment, and closing costs.
2. Requires a Short-Term Commitment
When buying a house, you need to consider how long you intend to live within that city. It is challenging to breakeven on a bought house if you live there for only three years. Home buying involves a significant amount in the form of closing costs and down payments. Bear in mind that the entire mortgage amount does not go into equity building. In that regard, if you are looking to live in Arizona for less than ten years, consider the home renting option.
3. No Maintenance Costs
Paying for property repairs, repainting, re-roofing, and infrastructure replacement involves a significant amount of money. Renters do not need to worry about paying for property maintenance costs.
For homebuyers, you need to have a budget to take care of property maintenance. Therefore, when assessing whether to rent or buy, bear in mind that part of the costs of buying is the annual maintenance costs. If you cannot afford the cost of property maintenance, you should opt for renting a home in Arizona.
The Disadvantages of Renting a Home in Arizona
Understanding the pitfalls of renting a home in Arizona helps you make an informed choice for your family. Although renting involves fewer costs compared to buying, there are still disadvantages to bear in mind. Let us look at the cons of renting a home.
Renting a home comes with instability. The property owner can eject you out within 30 days’ notice. Besides, a change of property ownership means you may be kicked out at any time. As we continue experiencing economic instability, the rent rates may go high, making it hard to pay rent when due. In that regard, renting a home comes with so much instability compared to owning a home. Homeownership comes with stability. Your family feels secure as you already own the parcel of land and the building.
2. No Equity
The monthly rent cycle is money that is not being invested. There is no long-term security, nor can you sell the room you are renting. Homeownership is an equitable long-term investment, and upon retirement, you can borrow against the equity. Homeowners can take steps to increase property value and decrease risk. However, for renters, no matter how strategic the location, you will not build equity.
May rented apartments will not allow the renters to make changes to the design, leave alone repainting the living room. Any changes you intend to do must have express authorization from the property owner. Tenants have to abide by the rules set by the property management company or by the proprietors. This includes paying rent not later than a particular date and notifying management anytime you expect a visitor. If you own a home, you can invite anyone and enjoy living with pets without notifying management or paying the penalty for not abiding by anyone’s rules.
4. No Tax Incentives
Property owners enjoy several taxation incentives. For home renters, you have to deal with unstable residency, and apart from that, there is no taxation incentive on the monthly rent cycle. For homeowners, the Government provides tax incentives. For instance, interest on house loan is tax-deductible. However, for renters, monthly rent payment is not tax-deductible.
Having looked at the pros and cons of renting a home, you can now decide whether to rent a house or buy your own home. If you can cope with the disadvantages of leasing, consider the best home rentals in Arizona.