Leasing vs. Homeownership
It was a cold Michigan Saturday afternoon and I was home watching college football with the family when my phone rang. One of my tenants had a problem. She woke up to a cold house and noticed the heat wasn’t coming on. The repairman I called later confirmed what I already had guessed…the furnace was shot.
So who’s going to pay for the repair? If you own a home, the unexpected repair bill is coming out of your pocket. Renters, however, have the security that any unexpected fixes are paid for by the home owner. It’s just one of the advantages to renting a home.
To some, the American dream is owning your own home– but that’s not everyone’s dream. A friend of mine recently went through a divorce and had to sell his house in the process. He now rents a condo and tells me he loves it. He pays a fixed monthly amount and has the snow removed and lawn mowed for him. It’s easier for him to budget his expenses and he says he’ll never own again.
Flexibility is another advantage of leasing. If you’re unhappy with a house or move because of a job you can easily relocate. You don’t have a lot of options if you own a home. Especially if you owe more than the current market price, you could get stuck.
But I don’t want tenants to be unhappy and move. As an owner, you’ve got to invest in your property and take care of your tenants. Its much more cost-effective to keep them renting. Each time a tenant moves out it costs the owner hundreds of dollars in lost rent and repairs.
I was contacted by a young woman renting in Manistee who was frustrated with her landlord. The long-cold winter and deep frost had frozen her water pipes and after two weeks, the homeowner had yet to fix it. Neither are clients of mine, so there was little I could do for her but talk to her about her rights as a renter. I only work with homeowners who take care of their renters and their properties. I always recommend an owner reinvest a portion of their profits back into the property–it’s in their best interest as well as the tenant’s when issues like this come up.
As for my tenant with no heat–in one afternoon, I contacted the homeowner and arranged for a new furnace to be installed same day. She is a tenant I want to keep and the homeowner will recoup his money for the repair by keeping his property rented. As for me–I went back to watching the game.