In the past, many people believed you should buy a home instead of renting it.
The idea back then was that renting a place to live was the same as throwing your money away. However, if you were to buy a home instead, you were investing in something to sell later and get your money back, which ultimately saves money.
But, depending on your individual circumstances, it doesn’t always make sense for everyone to buy a home.
Why Renting May Be a Better Move
Let’s say you are only going to be living in a place for a short time, say six months to a year, because your job requires frequent moves. In that case, renting is likely the more desirable option for you and would actually save money in the long run.
Let me explain.
Purchasing a home requires a down payment, as well as inspection fees, closing costs, and realtor fees. In addition, if you don’t have enough money to buy the home outright, you may need a loan.
To make it worth paying all those fees, you would need to stay in your home for at least a couple of years to avoid losing money on the deal. This is why it would actually save you money to rent a home instead of buying it.
Obviously this strategy doesn’t only apply to home ownership vs renting. There are other things to rent instead of buy to save money.
Although many people do own their own cars where I live, owning a car isn’t practical for everyone. If you live in a city, for example, you must have a place to park or store it. This can cost you extra money on top of the cost of the automobile.
When you travel within the city, you might find it more economical to take a bus, subway ride, or other mode of transportation to get around. Long trips can be accomplished by train or renting a car instead of buying one. Again, ultimately saving you money.
2. Garden and Power Tools
Growing your own food can be a money saver for you and your family. But to make it worth owning a tiller, for instance, you would need to garden several years to offset the cost of a few hundred dollars.
Then there are mulchers and other equipment you may need.
By the time you shell out the necessary capital for these items it can set you back quite a bit of money. Perhaps it would be wiser to rent instead of buy to save money on these items. Or, team up with a friend or family member. Each person could own different tools and share with each other.
3. Utility Trailer
Do you need a utility trailer to move something large, such as a new washer or dryer for your home? It might not be the most efficient use of your money to buy such a costly item if you only need to use it once in a while. Consider renting the item instead, or better yet, find one you can borrow from a friend for free.
If you are going to be attending a very formal event in the future, you may need the right clothing. I am talking about sparkly designer dresses, shoes, and handbags.
Owning such items comes at a price, and it isn’t cheap. For a single event, you could send up spending a thousand or more just to outfit yourself for a gala event.
Why not rent instead and save a bundle? You can save $1,000 on a dress by renting it over the internet from sites such as renttherunway.com.
Sometimes Renting is Better
As you can see there are plenty of things to rent instead of buy to save money in your budget. Other items you might consider renting are accessories for your night out, sports gear for a weekend of fun, college textbooks, video games, and more.
Before you rush to shell out a bundle of money in the future for an expensive item, consider the possibility of renting or borrowing before you buy.
Have you rented things in the past to save money in your budget? If so, what were they?