The endless debate over the merits of purchasing a house versus paying rent for dwelling space is not likely to die down anytime soon. On one side of the debate, home ownership is one of the elements of the American Dream, an economic construct that has probably seen better days. On the other side of the debate, it’s difficult to forget that the Great Recession could have been avoided if more people agreed to continue paying rent instead of taking out mortgages they couldn’t afford.
The dream of property ownership is a bit oversold, but this doesn’t mean it should be permanently retired. Renting makes sense for many residents of Southern California, particularly when you consider the following benefits.
1. Lower Insurance Costs
Homeowners insurance policies in California tend to feature higher premiums because of property values. For the most part, mortgage borrowers are obligated to pay for HOI policies with minimum coverage determined by lenders. However, this is not the case for renters insurance. San Diego renters insurance policies tend to be far more flexible and affordable.
2. Fewer Upfront Costs
The American real estate industry is an economic behemoth financed by homebuyers who face considerable costs when they acquire properties. The standard costs of a rental agreement, which generally include payment for the first and last month as well as a security deposit, are considerably lower than down payments and mortgage closing fees.
3. Less Economic Uncertainty
Tenants know the value of their lease contracts will more than likely increase when they renew or extend their terms, but homeowners never know if their property values will go up or down. Mortgage borrowers can end up going upside down or underwater on their loans, but this cannot happen to renters.
4. No Responsibility Over Real Estate Taxes
Property taxation in Southern California is among the highest in the U.S., but this isn’t something renters have to worry too much about. While the cost of real estate taxes is often reflected on monthly rental payments, tenants don’t have to worry about funding escrow accounts or having tax liens filed against the property.
5. Lower Maintenance Costs
Depending on the conditions and provisions of rental contracts, tenants may not even have to worry about replacing light bulbs. The maintenance issues renters have to worry about are nothing compared to what homeowners are expected to care for. The only downside renters may face in this regard is not being allowed to do major upgrades to their living spaces.
6. Better Locations for Renters
The rental market is very competitive. To this effect, developers of condominiums and apartment complexes tend to seek the most attractive and convenient locations for their projects. Prospective homebuyers who wish to live in the center of it all will be expected to pay considerably more for prime locations. Otherwise, they’ll have to settle for the suburbs and longer commutes.
If you need reliable and affordable renters or homeowners insurance, reach out to Altra Insurance Services. We also provide commercial, motorcycle, and car insurance Chula Vista. Local residents can call one of our friendly agents at (800) 719-9972 for a free quote.