April 2017

Buying a house or a condo is a big decision. Are you willing to commit the next 20 or more years to paying off your home? Are you in a position to put together thousands of dollars to cover a down payment and closing costs? For some people, buying is the best choice, but in many cases, renting can be the better option — especially in the short term.

Here are some situations in which renting makes a great deal of sense. 

You don’t know where you’ll be in five years.

One of the best aspects of renting is the flexibility. When you’re young or figuring out your next move, you may not feel settled enough to make the home-buying commitment. Selling a house before you’ve lived in it for a five-year period doesn’t make much financial sense. Closing costs often come in around 10% of the price of a home, so it takes five years before you can compensate for those costs. If you’re not sure whether or not you’ll be sticking around Rochester that long, renting is the smarter option.

You’re new to the area.

When you’re making a big move to a new area, you might think you’ll feel more settled if you get a place that belongs to you right away. But you might want to think twice about that. You may find that you don’t like your job or the city and want to move again. You’ll also get a much better feel for which neighborhoods you like once you’ve lived in the city for a year or so. Your coworkers and friends can tell you about the cool hangouts, school districts, and area reputations, and you can take some time to gauge where you enjoy spending your time. If you rent and find your new neighborhood is completely different than what you expected, you can pick up and move. If you’ve bought a home, you’re out of luck.

You’re planning for tax deductions.

One argument people use to convince you to buy a home rather than rent is that is the interest on your mortgage is deductible while your rent provides no such benefit. But this deduction is often overemphasized. You can only claim it if your personal itemized deductions equal more than the standard deduction. And it’s likely this deduction won’t apply later in the life of your mortgage since the interest payments decrease as time goes on. People also sometimes confuse the deduction with a tax credit. A credit will give you a specific dollar amount off your tax bill, while a deduction will just decrease your taxable income.

You want more free time.

Once you own a home, your honey-do list gets a whole lot longer. You become responsible for the maintenance and repairs that keep your home in livable condition. As a renter, you can often get off scot-free for both maintenance and minor repairs. This frees up all the time you could have spent fixing leaky faucets, broken shingles, and other unsightly damage that creeps up around a house.

Renting provides an opportunity to simplify your life, maximize your options, reduce your expenses, and let someone else worry about the honey-do list. For a lot of people, it just makes sense! If renting is right for you and you want to be at the heart of the action in the Rochester area, be sure to schedule a tour at South and Hickory Place. Our South Wedge location is convenient to the cities hottest culinary and entertainment spots, and the community just keeps growing!