Renting has seen a sharp uptick in recent years. On average, the rising generation seems to prefer it to outright buying a home. A report done in the United Kingdom estimates that 1/4th of all households will be renters by 2021.
Why is this happening? What’s scaring people away from home ownership?
Reasons for Renting
Inflation is crawling onward, and wages aren’t rising to meet it. As a result, individuals and families simply can’t afford the costs of home ownership.
When you rent, you typically pay a security deposit, and then a normal, flat rate for the duration of your lease. Conversely, a mortgage is much more involved. While the down payment and monthly mortgage may be similar to rent, there are also property taxes and school taxes.
And heaven forbid something breaks. If you buy a house, then three days later your hot water tank bursts and floods the basement, that’s on you to replace.
If you have a decent landlord, you can typically rely on him (or maintenance) to fix any problems around the property. But as stated above, this isn’t the case with home ownership.
Some people simply don’t want the responsibility and pain associated with owning a home.
Being Tied Down
Job security isn’t what it used to be. Suppose you get a better job offer 2,000 miles away. If you’re renting, you can pack up and go within the year (depending on your lease). If you own a home, relocating becomes much more involved.
With all this in mind, it’s no surprise that many people are choosing to pay rent as they save for a down payment.
But, we’re not done yet. There’s another rental rising in popularity, the vacation rental.
Services like AirBnB, Uber, and Lyft are putting dents in their traditional counterparts. Some of this is because of cost – renting an AirBnB is usually cheaper than booking a hotel in the same city.
However, consumers may be influenced by the homely appeal of these services. Hotels are very uniform. An AirBnB is someone’s property, with decorating quirks not seen in professional hotel design. Hence, it feels like home.