Generation Y: The Benefits of Leasing vs. Buying


 
     There have been many reports praising the value of leasing vs. buying a home. For many years purchasing a home was the American dream, now it seems that dream has changed, especially for Generation Y which has witnessed the recent decline and chaos of the housing market, high unempoyment and lower wages. For many older Americans the idea of purchasing a home was a promising investment, something that could be passed down to children, or used to put their children through school. This has all changed, home ownership is no longer being viewed as a business plan and in such a fast moving, global society, the new generation no longer wants to be tied down by a house they've inherited. In addition, those who do manage to pay off their home are left to deal with ever increasing property taxes. However, as much as there are negatives to buying there are still and always will be positives but let's take a look at three promising reasons to lease; at least before you commit to buying: 

YOU’RE NOT TIED DOWN


During these economic times the unstable job market provides a very obvious benefit to leasing. If you get laid off from work and are unable to find a job in your city, state, country, than you probably don’t want to be tied to that one particular area. Having a mortgage payment hanging over your head while you are trying to find a job can be a complete nightmare. The same can be said when you have rent to pay, however, the benefit to leasing is that it is usually short term (1 year vs. 30 years). Most people can make ends meet by picking up part time employment, freelancing, unemployment etc.; With leasing you usually also do not have to worry about repairs, especially major repairs, which you would have to fix if you owned your own home. There is no home insurance to pay; renters insurance is typically much less expensive. Without the mortgage payment, you’re pretty much free to go anywhere in the world and rent a home; this is ideal especially for young people that are facing an extremely competitive job market and still need to acquire years of experience before they can enjoy employment stability and higher wages.


No Saving for a Down Payment

Being a generation that has been and is being highly influenced by global communication, travel, and the “cloud,” there are many more diverse living options for our future than in previous generations. High unemployment and school loans have pushed back many plans to purchase a home and/or start a family; becoming debt free is definitely a high priority. In addition, the increasing demand to travel out of state or out of the country for work definitely does not make home ownership appealing. Rather than saving thousands of dollars for a down payment in order to become debt free, Generation Y would prefer to pay off their debt, travel around the world, or start a business. Influenced by creative lifestyle books, such as “The 4 Hour Work Week,” my generation understands that there are other alternatives for success. A home is not a business plan, rather than investing your money into a home you could invest in a business that will provide you with additional income in the long run.


Amenities

In addition to not have to worry about repairs, the next best thing that comes from leasing is the amenities that so many of these new apartments offer, such as, fitness centers, game rooms, free Wi-Fi, tanning beds, washer and dryer in units, swimming pools, etc.; Many of these new construction apartment communities offer a lifestyle to future renters, units tend to offer more creative updates, such as, granite counter tops, neutral paint coloring, hardwood floors, crown molding etc.;

Clearly, there will always be benefits to purchasing a home, especially once you start a family and schools start to play an important role. Until then, it’s important that the many benefits of leasing are not overlooked.

 


Property Leasing for Additional Income!

 

1. What does the process of leasing your home involve?

Well, that can depend on your needs. If you just want to do it all yourself, you can! You go get a “for lease” sign, you market your home in the newspaper, online ads, etc; screen your own possible tenants,  write up your own standard lease, that you can probably download from a reputable site and if you’re a handy person you can be in charge of repairs (depending on the terms of your lease agreement). For some homeowners, however, there just isn’t enough time in the day. The ability to utilize the knowledge of a realtor is much more desirable. A realtor can do all of the above for you, including referring you to a company equipped to handle any necessary repairs. 

2. How can I ensure quality tenants will lease my home?

You can’t, life happens, people that would otherwise be extremely responsible, sometimes are forced to do what is economically best for their own families. However, you can increase the probability that you will lease to a quality tenant by performing proper screening, consisting of: employment length; income and rental verification, as well as a credit report. A home is a very personal investment and it is very important that when you are leasing your own home that you or your realtor utilizes an efficient screening method.

3. How much will leasing my home cost me?

Again, that depends, if you decide to do this all yourself or utilize the services of a Realtor. If you handle everything on your own, you’ll be saving the payment to a realtor, which typically can consist of first month’s rent, or percentage of total monthly rent to be received, however; this will all depend on your home’s price, location, agreement between you and the realtor etc. You also have the property management fee, if you decide to go that route. However, there is always the risk that if you don’t follow the right procedures; lease agreement, proper screening, leasing your home could cost you much more.