“The housing bust taught us to be wary,” says the Washington Post in a recent article about falling homeownership rates – rates that are expected to continue to fall until the amount of renters exceeds the amount of homeowners in the United States. “Viewed another way,” the article continues, “a big surge in renters is coming.”
With the housing market still in a state of flux, many Americans have chosen to forego a mortgage and take solace in the ease of renting a place to live.
The National Apartment Association notes that by the year 2030, a majority of the estimated 22 million new U.S. households will be renters, not buyers. These combined articles suggest that perhaps the future is dim for homeownership but, as the old adage goes, where one door closes, another opens.
Home lending regulations have become much more restricted since the collapse of the housing market, and many people don’t want to deal with the hassle and red tape involved in taking on a new mortgage. In addition, young people are increasingly wary of laying down roots in a particular area. Because of this, the flexibility of renting has become more attractive due to the short term options of a lease.
If renting and buying battled it out in a boxing ring, they’d be well matched. There are many benefits to buying a home, of course, but recent research shows that renting is a viable option that can leave you with more money in your wallet – money you can put toward retirement, stocks and bonds, and more.
More People Choosing To Rent
In 2014, CBS News honed in on an obvious misconception. According to their article, “the vast majority of homebuyers say thought bought because they thought their home was a great investment. But, in many cases, they could have done far better investing in a diversified portfolio.”
One study performed by Hart Research Associates found that 57% of adults believe buying a home is less appealing, 54% prefer apartment renting to home ownership and 45% of surveyed homeowners expressed interest in returning to apartment renting.
Among the key findings in the National Apartment Association survey:
- Leasing rental property perceived as more favorable to holding a mortgage: 76 percent of adults feel that there are advantages to renting vs. owning in the current real estate market, an increase of 5 percent from 2008. 64 percent cited having no responsibility for major repairs or maintenance as the primary reason, followed by 50 percent who cited financial reasons such as not being impacted by an unpredictable real estate market(33 percent – an increase of 1 percent from 2008), and not being susceptible to foreclosure (tied at 33 percent).
- Renters are not eager to make a change this year: 60 percent of renters plan to continue renting their current residence or rent new residences within the next year. 12 percent of renters said they have plans to buy a new home this year and only 14 percent believe that buying a house is preferable to renting given the current state of the market.
- Homeowners tied down and staying put: 71 percent of homeowners will stay in their current home over the next year, mirroring almost exactly the response from 2008 (72 percent).
- Adults continue to experience economic backlash from the foreclosure crisis: 93 percent of adults feel that the financial security of homeowners is more or equally affected by the current state of the housing market – no change from 2008 – illustrating that the economic impact of the foreclosure crisis has not shifted or improved.
Renting Means Extra Money You Can Invest
Putting your hard-earned money toward a hefty mortgage means you won’t have anything left over to invest in the stock market even IRAs. Renting gives you the option to upsize or downsize based on your needs and financial position in accordance with your budget: if you choose a company like 1st Lake Properties, your options for renting are practically endless, meaning you can rent an apartment home that’s right for you and use your extra income more wisely.
Renting Offers Flexibility
Moreover, HelloWallet found that the average homeowner moves within 9 years. That sounds like a long time, but when you’re tied to a 30-year mortgage, you end up paying more of the money to interest rather than principal. On average, “households would build 50 percent more wealth over a 10-year period by renting,” according to HelloWallet.
The takeaway? Renting and investing the difference helps you stay comfortable in the present – thanks to lush amenities like pools, gyms, and balconies or home offices – while also contributing to your future.
Here are a few other reasons to rent:
A home mortgage is sometimes not an option for those of us with less than great credit. It’s interesting that apartment renting can actually build up poor credit and should be considered an investment in your credit rating.
Location, Location, Location
Purchasing a home in a city like New Orleans is incredibly pricey, but renters get the advantage of unbeatable proximity without the high monthly mortgage and insurance. Many of our properties are just a quick drive to sought-after areas like the French Quarter and the Central Business District without the high price tag.
It’s More Affordable
In addition to providing money up front for a down payment, when you buy a home, you’re also responsible for a monthly mortgage, property taxes, insurance, and even the possibility of homeowner’s association fees. Plus, you’re responsible for maintenance and repairs, water, utilities, and trash. It adds up!
It’s unlikely your home will include a full house of amenities like resort-style pools, an attached covered garage, backyard cabanas, and a state-of-the-art fitness facility – but these are all a reality when you rent from a 1st Lake Property (like Bella Ridge, for example).
Free Up Your Free Time
No yard work. No maintenance. When you rent, all these annoying chores are taken care of by professional staff at a moment’s notice. If something breaks in your apartment, just contact our main office. We’ll take care of the rest.
There’s no better time to make an apartment rental your first choice.
Even if you plan on eventually becoming a homeowner, renting is a great way to become acquainted with the responsibilities of living on your own and the flexibility of a lease can allow you to wait until the perfect time to buy a home of your own.
We’re constantly improving at 1st Lake Properties, from updating apartment communities to adding seasonal landscaping and so much more. We’ve recently built new communities, too, like our Bella Ridge property in Elmwood with luxury units that have all the comforts (and more) of any standalone home. An on-site dog park, gorgeous pool, and state-of-the-art fitness facility are all worthwhile additions we’re so pleased to be able to deliver to our residents.
What’s more, our improvements aren’t limited to actual buildings – we’ve added helpful assets on our website like our apartment moving checklist designed aid residents during transitions from one 1st Lake community to the next.
Consider being in that growing number of apartment renters and check out all of our New Orleans area apartments for rent.