Why High-Income Earners Are Renting vs. Buying A House
The best way to keep a rental unit occupied is to meet the demand of the people most likely to live there. If you have been watching the rise in average rents across the country over the past decade, you should know who is making that happen.
Right now, there’s a lot of competition for rental housing from high-income earners who just aren’t interested in buying right now. Renting suits their lifestyles better, but they have high expectations for a rental unit. Here are some reasons tenants might prefer renting vs. buying a house.
Easy Transition
For most people, renting offers more opportunities to choose or change their mind than buying. Finding housing requires a comparison of the best neighborhoods in which to live, balanced by a discussion of the types of housing a person needs. Buying almost always involves more compromises, and it isn’t something that people can change on a dime.
Someone who needs to relocate every year or two might lose money if he or she tries to buy and sell a house in each location. By renting, this individual has more options for housing in the perfect area, with the ability to get in and vacate quickly.
Better Standard of Living
There is a big difference between being able to afford a home and being able to buy the home you want. Some areas have a stark difference in the quality of homes for purchase compared to the features and amenities available in a rental unit.
Someone who needs to relocate every year or two might lose money if he or she tries to buy and sell a house in each location. By renting, this individual has more options for housing in the perfect area, with the ability to get in and vacate quickly.
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Less Competition
In many areas, the housing market is so competitive that buyers have to spend months building connections. Buying a home is more like getting a job, with the need to persuade the seller to make a particular choice. Renting is so much easier, with predictable expectations for availability and costs required.
Even people who plan to buy a home eventually might prefer to rent while they consider their options or wait for the market to shift. Although rental units can be competitive as well, opportunities to grab a great rental home come up more often than houses for purchase.
More Assets Available for Investment
Housing is an investment for anyone who buys, and it isn’t always the most reliable one. Although real estate usually appreciates over time, markets can dip at the worst possible moments. Someone who is focused on their investments might not like having to tie up so much of his or her money into a single asset.
For high-income earners who only have a small net worth, growing investments could be the most important goal. The down payment and expenses put into upkeep on a house might be much more money than they want to spend. Renting allows them to secure housing at a lower cost, freeing their income to diversify their investments.
Catering to a market of high-income tenants can be a great way for investors to grow their portfolios. Meeting that demand requires understanding what these tenants expect and the best ways to give it to them. Renovo Financial offers loan programs that make it easier for investors to purchase a property, get it ready for a tenant, and start earning rental income as soon as possible. Contact us to learn more about our options.
Contact Us
Ready to get started? Want to learn more about how we can help you grow your investment business? Call us at (888) 568-8894, email us at origination@renovofinancial.com or fill out the form below and a representative will be in touch within 1-5 business days.
Renovo Financial
222 W. Adams St, Chicago, IL 60606
origination@renovofinancial.com
(888) 568-8894
