Buy a house, they told you. It will be a great investment, and it’s – well, it’s just what adults do. Maybe once upon a time, that was true, but it’s not so much the case now. Today, especially in urban areas, renting is often more popular than buying a home. Let’s examine, then, some of the solid reasons why more people are choosing to rent in Chicago and across the country.
No Down Payment
First of all, a lot of people are choosing to rent in Chicago because they don’t have to come up with a down payment, whether they simply choose not to or can’t round up the cash. Remember, the typical down payment for a home is around 15% to 20% of the purchase price. So the down payment for a $150,000 home could be as much as $30,000. It would take most people years to save up that kind of money, and they have to have somewhere to live in the meantime. It just makes more financial sense for many people to rent rather than sinking tens of thousands of dollars in a down payment.
Also, people are choosing to rent in Chicago because they will have fewer expenses as renters. They don’t have monthly mortgage payments with interest tacked on, and they don’t have any maintenance expenses either. In addition, renters don’t have to worry about paying for homeowner’s insurance, buying appliances, or coming up with property taxes every year.
As for property taxes, just consider that these can run anywhere from$900 to $8,000 every single year. And then there’s all the upkeep a home you own requires painting, roof repair, HVAC maintenance, and HOA dues. Home ownership can be a mighty expensive proposition.
More Money for Other Things
Similarly, more and more people are choosing to rent because, with no down payment and fewer expenses, they have more money for other things, especially for investing. Buying a home has traditionally been touted as a good investment, but there are many others that can yield a better return. And if you’re sinking all your money into home ownership, then you’re violating the number-one rule of investing – that is, don’t have all your investment eggs in one basket. Also, with the real estate market as volatile as it has been, homes can depreciate rather than appreciate.
Agility and Flexibility
For many, the most attractive thing about renting is the agility and flexibility it affords. You’re not tied down to a home with mortgage payments – you can pack up and go pretty much when you want to. This is an especially important consideration for people on an upwardly mobile career path, who never know when a promotion may mean moving across the country. And then there are all those unexpected events that life throws at us – death in the family, divorce, job loss. Any of these may require a rapid relocation, which just isn’t possible if you own a home. Selling a home can take anywhere from several weeks to many months.
The Millennial Phenomenon
Increasingly, millennials are choosing to rent in Chicago and elsewhere instead of buying. In fact, among millennials, home ownership is decreasing at a faster rate than among those in any other group. Some of this phenomenon can be attributed to student loan debt, but not all of it. Those millennials are pretty savvy folks – maybe they’re on to something. Are you looking for a great rental property in Chicago? Contact us now – we can help! 773.233.8180