In today’s world, we have the option to rent just about anything. From homes to cars to clothes and accessories, we have endless options. But when is it best to buy? And is renting ever the better option? Let’s discover the pros and cons of buying vs. renting.
While buying a home might seem like what you are supposed to do as a “grown up,” it is not the best option for everyone. A few reasons to rent instead of buy include flexibility with life changes, uncertainty in your job or income, credit issues and the joy of not being responsible for most maintenance expenses. If you are settled in your job, have good credit, plan to stay in the same area for at least five to seven years, and can afford to purchase a home, buying may be in your best interest.
A third option is rent-to-own. In this situation, a tenant usually pays a fee called “option money” to allow them the option of buying the house at the end of the rental term and pays about 20 percent above the typical rent for the house. A portion of that rent is credited to the tenant for an eventual down payment. If the tenant decides not to purchase the house at the end of the rental term, the extra money that he or she paid is not reimbursed. The tenant is also often responsible for repairs and maintenance during the lease term, and any money or sweat equity you put into the rent-to-own property will not be reimbursed.
In most cases, it makes more sense to buy a car than it does to lease, especially if you drive a lot of miles, have children who may damage the interior, or if you are particularly rough on vehicles. There are a few instances where leasing might seem like a better option, but according to Consumer Reports, the financial workings of leasing are so confusing that people don’t realize that leasing invariably costs more than an equivalent loan to purchase the vehicle. However, many people cannot afford the higher payments that buying requires and opt to lease so that they can drive a new model car for a lower monthly payment. If payments are your main issue, consider buying a lower-cost new vehicle or a reliable used one.
Your clothes and accessories
With the rise of online retailers have come a slew of options for renting both clothing and accessories. While it is obviously necessary to have staple pieces in your wardrobe, the idea of renting clothing has moved from just special occasions to everyday wear. While rental sites like Renttherunway.com cater to fancier outings, sites like Letote.com and Gwynniebee.com cater to everyday pieces to spice up your wardrobe with a variety of subscription options depending on your budget.
If accessories are your thing, renting that great pair of boots or that designer bag from a site like Bagborroworsteal.com might be more cost-effective than buying them outright. In general, if you are going to wear an item over and over again (think your favorite jeans, your go-to sandals, the little black dress that works for any occasion) buying is probably your best bet. If you are looking for a little variety but don’t want to spend big bucks on pieces you won’t wear often, then renting might be in your best interest.
Regardless of what you are looking to buy or rent, as a savvy consumer you have tons of options at your fingertips. Do your research and make the best choices for your personal situation. Happy shopping!