Robert Magda: "You're Throwing Money Away" and Other Myths About Renting

Friday, August 5, 2016

"You're Throwing Money Away" and Other Myths About Renting

Renting a home can often get a bad rap.

It’s true that some aspects of being a renter are less than glamorous. The quirks of renting can range from 1980s burgundy carpet to a neighbor who loves to practice the trombone every evening for three hours or a landlord who refuses to take down the Holly Hobbie wallpaper in the kitchen.

But it’s not all bad. In fact, the number of renters is on the rise, and the traditional mindset about renting is changing rapidly.

Here are three of the most common myths about renting that are ripe for debunking.

1. You're throwing away your money

Many people say giving your rent check to a landlord each month is like taking your money and throwing it away. While you may not be gaining equity in a home when you rent, you are paying for somewhere to call home, which is not the same thing as throwing your money in a trash can.

And let’s not understate the value of not being responsible for household maintenance costs. Most rentals include upkeep and repair services, and some even include the cost of utilities.

More importantly, buying a home may not be a wise financial decision for you right now. Maybe you live in a very expensive housing market, or you’re unsure how long you’ll stay in your current location, or you don't have quite enough saved for a down payment. Simply put, renting may be in your best financial interest.

To find out whether renting or buying is more financially viable for you, there are several tools available to help you make an informed decision.

2. You have no negotiating power

A common myth surrounding the landlord/tenant relationship assumes the landlord has all the power.

Contrary to popular belief, renters have a lot of negotiating power when they sign a lease, says Tracy Atkinson, director of global marketing and relations for Goodman Real Estate in Seattle.

"If you think you may be buying a house soon ask, 'Do you have a mortgage clause?' You can also ask about a job relocation clause. Simply ask, 'Can you work with me?' Each resident has the power to do that," she advises.

The most important thing is to read the lease in its entirety to ensure you understand what you're signing. If you see terms you want adjusted, don't be afraid to ask.

3. It's difficult to get out of a lease

Another common misconception about renting is that it's hard to get out of a lease.

Though it's not advisable to sign a long-term lease when you know there are some life changes up ahead, sometimes life throws us a curveball. Whether you have to relocate for a job or your roommate moves out and you need to downsize, sometimes it's necessary to break your lease unexpectedly.

If you need to get out of a lease without having to pay the remainder of the lease term, one option is to sublet your place. Check with your landlord or property management company to ensure that subletting is allowed, and get everything in writing from both your landlord and the new tenant.

Another way to break your lease is to work with your property management company to find out if there are any available units in the same building, at a sister property, or even in another state if you are relocating. Talking with your property manager and explaining your situation will always help you find the right solution for you, Atkinson says.

Of course, there may be fees associated with breaking your lease no matter how you choose to go about it, so be prepared for that.

Looking for more information about renting? Check out our Renters Guide.

Related:

What's negotiable in a rental contract?

Take our brief survey and let us know if you would consider modifying a rental contract.

Landlords: Are you willing to modify your rental terms?

Renters: Is it worthwhile to negotiate, even if you risk losing the unit?