Both owning and renting a house have long lists of pros and cons, but people often hear more about the cons of renting. Some ideas about renting may not be entirely true, both positive and negative.
Should military families rent or buy a home? Here are some common myths about renting a house, along with a realistic evaluation to help decide the best fit for you.
Photo by fizkes from Getty Images via Canva.com
Myth #1: Renting Is a Waste of Money
Is renting really a waste of money? One of the biggest criticisms of renting vs. buying a home is the lack of opportunity to invest. When buying a home, the monthly mortgage payments go toward paying off the house. One day, you own the property and have a little equity. When it’s time to sell, owners watch the market and list when they're likely to make the most profit, or they may choose to rent it out. Regardless, owning real estate can be a great investment.
While renting a house isn't considered a long-term investment, it doesn’t mean that it's always a bad choice. Renting allows for far more flexibility and freedom. Tenants don’t have to worry about the market or paying back a home loan. For military families with orders to move, they don't have to add selling their home to the long list of to-dos.
When you’re active-duty military dealing with PCS moves every few years, the lighter responsibilities associated with military rentals can be attractive.
For instance, instead of renting a house, you buy one, hoping to avoid wasting money. If you're stationed in the same place for a few years, that decision could make sense, but it's not the only factor indicating it's a good time to invest. Consider the current market, location, and resale value/rentability before determining if buying a home is more sound than renting.
Myth #2: Rental Terms Are Non-Negotiable
While negotiations are a known part of a home sale, rental agreements may offer a little leeway, especially in a renters' market.
If there are more rentals than renters in the area, you may be able to negotiate the rental price and other terms, such as the lease duration, pet policy, pet deposits, etc. A stable job in the military reduces a landlord's risk, and it can sometimes work in your favor to negotiate small details when securing a rental.
Even if the market isn’t booming with rentals, it doesn’t hurt to ask as long as you’re respectful. The worst that can happen is the landlord or property manager says no.
Myth #3: Landlords Are Responsible for All Repairs and Maintenance
Due to tenants' rights regarding repairs and maintenance, the landlord is responsible for maintaining the rental in a livable state. However, fixing cosmetic issues, such as stained grout or worn-out carpet, isn't legally mandated. Problems that affect safety or functionality, like loose tiles that make the shower unusable or carpet holes that could cause someone to trip, require the landlord’s attention.
Ultimately, just because the tenant isn't the homeowner doesn’t mean they're not able to change a burned-out light bulb, replace dead batteries, clean the washer and dryer, or unclog a drain. If these small tasks are all results of normal wear and tear and they aren’t indicative of a larger problem, they're the renter's responsibility to fix.
Myth #4: Landlords Can Come and Go As They Please
Privacy is a major concern when renting. However, landlords don't have the right to enter their property at any time. Checking on the property from time to time is reasonable, but most states require landlords to provide at least 24 hours' notice before entering, unless there's an emergency.
State laws vary. While most suggest landlords give notice, others don’t. Research your state’s tenants' rights.
Photo by PIKSEL from Getty Images via Canva.com
Myth #5: Your Landlord Can't Sell the House While It's Rented
A landlord can sell the house even while a renter is living in it, and they can sell for any reason. Capitalizing on a seller's market or exiting a landlord role are just two examples. However, the landlord can't terminate a lease agreement without proper notice, but they may ask a tenant to keep the house show-ready or cooperate with inspections. While that can be inconvenient, it's their right. Most states allow landlords to show the home during reasonable business hours with a 24-hour notice.
If a renter has a month-to-month lease, the landlord can terminate the agreement without explanation, but they’re still required to give 30-60 days of notice, depending on state laws.
When Does It Make More Sense to Rent Instead of Buy?
1. You don’t want added debt.
Homeownership is a huge financial responsibility. You might not be able to afford homeownership right now, even if a bank pre-approves you for a loan. Only you know whether you can keep up with mortgage payments, homeowners insurance, property taxes, and the costs of owning and maintaining a property.
Beyond the typical expenses every homeowner faces, military homeowners have another component to consider: what will happen when they move? In an ideal world, they'd be able to sell immediately and make a profit in a stellar sellers' market, or they'd have a line of tenants ready to move in, but that’s not a guarantee.
Evaluate whether you can afford a mortgage in your current location if you receive military PCS orders elsewhere while your home sits vacant. Have an exit plan if you're unable to sell your home.
2. The location isn't stellar.
Not every duty station is a gold mine for real estate investments. While some areas have frequent turnover of military service members, almost guaranteeing a never-ending pool of potential tenants, others don't. Finding a rental might be the best decision if the location doesn’t offer homes with great resale value or rentability.
3. You want to keep things simple.
Owning a home can be complicated with maintenance, repairs, and other expenses. It can also add unnecessary responsibilities for a service member and their family, especially for those on a rigorous deployment rotation.
When you have PCS orders, it’s easy to cut ties with military rentals. On the other hand, with a property you own, you’re responsible for deciding whether to sell or rent it, then doing the work to make that happen.
There's nuance in choosing whether it's best to buy or sell a home. It's one of those topics that requires constant evaluation as the variables change. Understanding the realities of both sides of renting vs. buying a home will help you make an informed decision.
Ready to find your next home? Whether you're looking for military rentals or houses to buy, click the image below to search MilitaryByOwner for the perfect home near your duty station today.
main image from iStock.com/jacoblund
