Home Real Estate Renting a Home: Advantages and Disadvantages

Renting a Home: Advantages and Disadvantages


renting-a-homeA home is the biggest purchase most of us will (or not) make during our lifetime, so renting a home seems like a pretty good plan.

While many people have decided that even a 30 year mortgage is better, since you have your own home, there are still people who’d rather rent for the time being.

Here are the main advantages and disadvantages of renting an apartment or a house:

The advantages of renting a home


Jobs are not secure anymore. You might keep a job for decades, but also change 10 in 5 years time.

When you own a home, you’re already tied to it. This means you cannot leave to easily.

What if your neighborhood stops being such a great place it used to be? Well, you’re in bad luck, you’ll need to deal with it.

Moving easily

A tenant tends to lug less stuff during  move than someone who owns the apartment/house. This makes the entire moving process easier and less costly as well.

No Down Payment

Buying a home means either paying the entire sum upfront (if you can afford to pay it at once) or take on a mortgage with a down payment.

Many landlords do request a ‘guarantee‘, a rental deposit, but it’s usually equal to one month’s rent, which is significantly lower than a down payment that’s at least 5% of the property value.

Ideally, the down payment should be as big as you can afford, so that you get better loan conditions. This means that the rental deposit is indeed a bargain, compared to that.

You pay less on a monthly basis

At least in theory a mortgage is more expensive than rent.

In my country monthly payments are sometimes smaller or just as much as the rent, but the norm is that rent should be less costly. Especially if you add all other property related taxes, insurances and expenses which landlords need to take care of.

Free access to amenities

In many upscale apartment complexes access to fitness centers or indoor-pools is free for the tenants. Just imagine how much it would cost you to build at least a small pool in your home and also maintain it.

No real estate taxes

Home ownership comes with a lot of extra fees and taxes and one of them is the real estate tax, which can be pretty high in some areas. These taxes are determined based on the estimated value of your home, but, since houses tend to get larger, property taxes increase as well.

As a tenant, this is yet another tax you don’t have to worry about.

Fixed monthly payments

Mortgages can fluctuate (and not always ‘down’), but rent is usually the same during your lease time. Sure, some landlords might change the prices (with notice), but overall you have a clear image of what you need to pay each month, making your budgeting work easier.

You can downsize if needed

Has your income decreased? Do you want to save money more aggressively? Downsizing when you rent your home is very simple, you just move into another apartment/house with a smaller rent.

Consequently, if you are eying a more posh neighborhood, you can move in as soon as you find something you like.

Insurance is way cheaper

Landlords need to pay a homeowner’s insurance, but you will get away with a way cheaper renter’s insurance, which can go as low as 12 bucks per month.

Not affected by the decreasing of your property’s value

Property values have gone down in the recent years and this has brought homeowners to the brink of bankruptcy, while keeping tenants unaffected.

It’s great to see your own property increase in value (together with your equity), but, when times are rough, being underwater with your mortgage is not fun. Refinancing an underwater mortgage is possible, but difficult as well.

The disadvantages of renting a home

Your hands are tied when it comes to the property

Would you want to redecorate? Get some fancier appliances and furniture?

Some landlords might agree with this, but in many cases you’re bound by your lease agreement’s rules, so there’s not too much you can do to make your home better.

Dealing with rental agents

Not all homeowners are doing their rental management themselves, so this means you’ll need to address a third party, whenever you need something solved.

You don’t build any equity and get nothing at the end

One of the biggest disadvantages of renting is that you’ll never own anything. You’ll be paying rent for years (tens of years) and get nothing in return, other than the right to use the property (just for as long as you’re paying rent, of course).

Dealing with all kinds of freaks

I have so many horror stories from friends who used to rent, that I could write a book.

Renting a home also means dealing with all kinds of people and their strange rules. This is the reason why all our friends have decided it’s better to deal with a 20 year mortgage than all that hassle.

You have no control over the lease time

Imagine you’re renting for a while, are happy with the neighborhood and suddenly your landlord announces you the lease won’t be renewed. Moving out from a place you really enjoy isn’t funny, especially if you have kids who already made friends there.

What other advantages and disadvantages would you think of when it comes to renting your home?


  1. Hi Ramona,

    Thank you for such an informative post. My wife and I are also looking for a decent apartment. You are right. Renting an apartment is hassle free as compared to buying an apartment.
    But we are looking for a luxury apartment furnished with all the luxury amenities. Do you have any idea regarding the price of the luxury apartments ?


  2. I prefer the idea of renting when you’re first starting out on your own because you are right that owning home ties you down. Owning a house isn’t for everybody. Something that I like to take into account is my lifestyle.

  3. We’ve been paying rent for the last few years. During this time we’ve moved 3 times and finally found our “home” where we’ve been living for the past 5 years. We love it here, but until we found this place we’ve had our share of ups and downs..

    Among the disadvantages, we had to deal with lousy neighbors, having our hands tied when we needed an upgrade or a change and awful landlords. But the biggest advantage for renting a home? Being able to move when you’re fed up with the disadvantages 🙂


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