The rental industry is on the rise! As the rental industry grows, so too does the influx of new property managers, including those operating online. Landlords are experiencing increasingly favorable pricing & a wider range of services for their rental properties. This post looks at who rents their home.
While the landlords are experiencing lower property manager fees and increasing average rents, there are also tougher property regulations and tax break cuts. Landlords must keep up with the ever-changing variables, while renters continue to forge-on, unfazed.
It’s pretty clear that in the long run, buying your own rental property is a wise financial investment. Some can’t afford the property deposit, however many people choose to rent to suit their lifestyle.
Here we’ll take a look at which groups of people are renting by choice, rather than due to limited financial options.
The Single Renter
Young, ambitious, career-driven: these single individuals (male or female), enjoy living life to its fullest. This includes exploring different housing options.
Instead of committing to one piece of property that they may be able to afford to buy away from the city, they prefer to rent in a more modern apartment near the city and nightlife.
The only hiccup is that these properties can cost as much as $1,000,000! Not many single individuals have this type of money, but may also not be ready to settle down in property too far from the bustling city.
Families with Kids
The first thing parents research before moving with their kids is the local school systems. Many of the best schools are in the most prominent areas where houses are at a premium.
Parents already located near a quality school are unlikely to move, which decreases house availability in that particular area, adding to the price premium.
“Parents looking to send their children to good schools are willing to pay high rent premiums if it means offering their kids a quality education. Some people view the extra rent as an offset for the money they might have spent on a costly private school.” Rentround founder, Raj Dosanjh
The Renting Landlord
Landlords often rent out their property, as opposed to living in it themselves, for a variety of reasons, whether it’s not big enough, too close to the city, or too close to your in-laws!
If you own a property and don’t want to sell it, leasing it out is a great option. While renting your property to someone, you can rent a different home or apartment that better suits your needs. In some cases, landlords can let their property for the same amount (or more) than the rent they’re paying for a small income. Renting out your house while also becoming a tenant yourself is a surprisingly popular option.
Recent Divorcee
With nearly half of marriages ending in divorce, it’s no surprise that many divorcees are also renters. Whether it’s during a separation or directly following a divorce, one or both spouses may experience instability in their living arrangements.
You may have a house or property to sell, a desire to live close to the city, or remain nearby to family, friends, and children. Each dynamic is unique.
During this period of uncertainty, renting is much more practical than buying a long-term property.
The Traveling Contractor
Many contractors go where the work takes them. That means traveling from one job to the next and not laying down roots anywhere specific or permanent. Contractors who move from one company to another have the benefit of high day rates and lower taxes compared to a more permanent employee.
As contractors move from one position to the next, often so does their location. In this situation, renting is really the only option unless the contractor wants to live in a hotel, commute absurd distances, or constantly buy and sell a property.
Soon to be Married
Most people reach a point in their life when they’re ready to settle down. Whether you’re in a long-term relationship or at that prime age and hoping to find Mr. or Mrs. Right, you need somewhere to live in the meantime.
Renting makes the most sense for singles on the verge of marriage. Once you tie the knot, you can look into purchasing a home and making a large deposit thanks to your combined incomes.
The Speculator
Saving investors often capitalize on rental opportunities. Whether through research or a hunch, they sometimes predict downturns in the market. Instead of buying while prices are high, they sit on a property and rent it until a potential crash happens. They can now buy a property at a more reasonable price and increase their profit.
In addition to price decreases, you may also see a cut in interest rates and tax subsidies from the government. Similar to what was done following the crash of 2008, the government does this in an effort to re-stimulate the economy.
The only downside to this approach is that an inaccurate prediction can result in a big financial loss. You also have to account for overhead costs including property manager fees, depending on the situation.
There are many reasons why people prefer to rent rather than buy property. In many instances, buying makes more financial sense long-term. But for those looking for flexibility or have other factors to consider like schooling, family, and work, renting is the way to go!
We hope you found this blog post on Who Likes to Rent a Home? useful. Be sure to check out our post on Apartment Hunting 101: How Much Rent Can You Afford? for more great information!
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