The American dream has always been to own your own home. But like everything, the times are changing and now so is that dream. Today, about 35% – 45% of renters are renters by choice. So let’s glimpse inside the dream that these folks have been having in the Seven Dream Secrets of Renting:
1. Flexibility. People change jobs today more often than ever. If anything, this trend is only likely to continue if not accelerate. Today, owning a home might mean missing the next promotion. For those making career a priority, renting just makes more sense.
2. Cash. Renting just doesn’t tie up cash like owning. The first month’s rent and security deposit are often less than even the closing costs associated with purchasing a home, let alone the down payment. And sometimes owning has unanticipated costs, like home owners association dues, insurance and unexpected repairs.
3. Tax Advantages. It used to be that owning a home had great tax advantages. But now the standard deduction is $6,300 for singles and $12,600 for married couples and interest rates are at all time lows. For some prospective home owners, the interest deduction might not be more than the standard deduction. And none of the expenses of home ownership like insurance and repairs are deductible.
4. Equity Buildup. The hoped for equity grown from ownership may never come to fruition. First, in the early years of a mortgage, most of the payment goes toward interest. Second transaction costs from a sale can eat up appreciation so severely that some experts say to plan on staying in a home at least seven years to break even on these costs.
5. Price fluctuation. It used to be that home prices only changed in one direction – up. But in more recent times, we’ve witnessed perilous drops in home values, leaving many home owners “underwater,” owing more than their house is worth.
6. Liquidity. If circumstances change – health, employment or relationships, being tied to a home can sometimes make a bad situation worse.
7. Lifestyle. Some renters by choice are just plain sick of maintenance, mowing and all the other drudgery of home ownership. Throw in that many apartments are located closer to transportation, shopping, entertainment and employment and it just makes more sense to rent.
No, its not a dream: Come see the wonderful options Decker Properties has, and rent a beautiful apartment. The hard part is deciding whether to rent at the new Catalina Crossing Apartments in Madison, or our our new Wilson Heights Apartments in Hartford. Call us at (262) 785-0840 for these and other great Wisconsin apartment locations.