According to the National Multifamily Housing Council study, 44.1 million Americans rented their homes. Additionally, 77% of the people in the Us prefer to rent instead of buying a house which is why nationwide, renters spend around $485 billion in rent every year.

For most investors, owning a home is considered to be a better investment than renting. Property is a financial asset that can appreciate over time, and a mortgage is similar to a long-term investment. However, as the prices of houses keep rising, Americans are looking for cheaper alternatives which is why most of them prefer to rent to own.

No Down Payment

Down payment requirements for your primary residence, or main home, can vary. Conventional loan requirements for primary residences are totally up to the individual lender. Some lenders might require you to have 20% down, while other lenders may only require 3%. However, even for modestly priced areas in the US, it will take median earners over ten years to save for a down payment.

Such statistics encourage most people to rent instead of own. As a tenant, all you need to pay is a security deposit that is equivalent to one month’s rent. The deposit is usually returned to the tenant when they move out unless they have destroyed the property. Americans prefer a DSN Information property with no down payment and a guarantee of getting their security deposit back.

Move-In Fast

According to the 2019 US Census Bureau Report, on average, it takes about seven months to build a house from start to finish. But you might also include the time it takes for an architect to draw up plans for the house, which can be between 1 – 4 months. The majority of people looking for a home and cannot afford to spare seven months for the construction to be complete prefer to rent to own.

As a tenant, you can move in fast without having to follow many procedures or construction timelines. Since you can move in fast, renting is the option for most Americans earning below the national average.  Additionally, when you move in fast, you get to settle much quicker, allowing you to focus on other things.

Easy Approval

When looking to purchase a house, you need to show documentation to prove your assets and income, good credit, and employment verification, among other documentation to be pre-approved for a mortgage. Most sellers expect buyers to have a pre-approval letter and will be more willing to negotiate with those who prove that they can obtain financing.

Renting a property has an easy approval process. While every building and landlord will have slightly different policies, it will still have an easy approval process compared to buying a home. The rental approval process is similar to taking out a loan. You must prove that you are not a credit risk and that you will keep up with monthly payments. Easy approval is a solution for individuals looking to move in fast.

No Credit Checks

Checking credit is the first step when buying a home. Each type of loan has a different FICO score, with the minimum being a score of 500 for an FHA loan requiring a 10% down payment. The number of credit checks varies depending on the situation; most lenders will check your credit up to three times during the application process.

Due to an easy approval process, no credit checks are preferred for renters. Once you prove that you can afford to keep up with the monthly rent, most landlords have a no-credit checks policy. However, if they decide to conduct a credit check, they must get your permission first. Additionally, there are no credit checks because they can make it take longer to rent out the property.

No Maintenance Costs or Repair Bills

One of the significant advantages of renting instead of owning property is that there are no maintenance costs or repair bills. Maintenance costs or repair bills may vary depending on factors such as size and age. It is often a rule of thumb that you should set aside 1% of your home’s value for maintenance every year. Combined with other expenses that you have to pay, the majority of people prefer to rent to own.

The landlord assumes full responsibility for all maintenance, improvement, and repairs when you rent a property. As a tenant, if your roof starts to leak or an appliance stops working, all you have to do is call the landlord, who is required to replace or fix the issue.

Flexibility to Downsize

Renters have the option to downsize to more affordable living spaces at the end of their lease. This kind of flexibility is especially important for retirees who want a less costly, smaller alternative that matches their budget.

It’s much more challenging to break free of an expensive house because of the fees involved with buying and selling a home. Also, if a homeowner has invested a significant amount of money in renovations, the selling price might not cover these costs, leaving them unable to afford to sell and move.

Access to Amenities

Tenants often have access to amenities that would otherwise be expensive to install as a homeowner. Amenities such as a fitness center or an in-ground pool come as the standard for many midscale to an upscale apartment complexes with no extra charges to the tenant. If homeowners wanted access to such amenities, they would have to part with thousands of dollars for installation and maintenance. Such expenses are rolled into the homeowner’s association fees which are charged on a monthly basis.

No Real Estate Taxes

The average American pays $2,471 in property taxes each year, per WalletHub and Census Bureau data. Median property taxes range from $587 a year in Alabama to $8,300 per year in New Jersey. Property taxes are often a significant expense for most homeowners, and they usually vary depending on state or county. In some areas, the costs associated with property taxes can amount to thousands of dollars each year.

While most states don’t have high property taxes, the more the home is worth, the more it will cost in property taxes. As a tenant, property taxes or any other taxes related to owning property are often behind you. The landlord is also responsible for paying the homeowners association fee, which runs about $200 to $300 per month.

Lower utility costs

Although homes can vary in size, they are typically larger than rental apartments. As a result, they are more costly to heat and also can have higher electric bills. Rental properties usually have a more compact and efficient floor plan, making them more affordable to heat and power than many houses.

Lower Insurance Costs

As a homeowner, you are required to maintain a homeowners insurance policy. The equivalent to that for a tenant is the renter’s insurance policy. According to a study by the Insurance Information Institute, the average cost for a homeowner insurance policy is around $1,249 per year. In contrast, the average renters’ insurance price is $179 per year. The insurance is cheaper and covers nearly everything owned by the tenant, including computers, furniture, and valuables.

You’re not Tied to it long-term.

If you’re not planning on staying in the same city for years, renting a house is an ideal way to go, as there are far fewer commitments. Ideally, they say five years is enough time for housing prices to rise and for you to sell the home and cover the costs of buying it initially. And for those who can’t promise five years, it’s probably better to rent. Renting buys, you the freedom to choose what you want in the future. If that means leaving to move across the country, you’re able to do that with no 30-year mortgage insight.

Fixed Rent Amount

The amount you pay for rent is fixed for the span of the lease agreement. While landlords can raise the rent with notice, you can budget more efficiently because you know the amount of rent you are required to pay.

The same applies to homeowners with fixed-rate mortgages, which also allow for efficient budgeting. But adjustable-rate mortgages (ARMs) can fluctuate, often resulting in rising mortgage payments due to higher interest charges. Property taxes are another variable that can increase costs for homeowners but don’t affect renters.

You are protected against losses.

Homes gain and lose value all the time, and it doesn’t always just have to do with the house itself. Neighborhoods can go up and down in value, for instance, or school districts can significantly impact the house’s value.

These are things you’d have to consider if you were buying the home. You might not want to live in the same area if you were going to buy the property.

But as home value fluctuates, it probably won’t be affecting your monthly rent payment too much. Without having to consider these factors, there’s a wider variety of locations available, rather than focusing on where the resale market is heating up.