Why Do Millennials Prefer Renting Over Buying a House?

Posted on: Sep 13, 2021 | | Written by:

Why Do Millennials Prefer Renting Over Buying a House?

Published on September 9, 2021. EST READ TIME: 3 minutes

Millennials are renting more. But, it may not be for the reason that you may think. It is not because of lack of capital that they prefer renting over buying a house. There are several other reasons why millennials prefer renting. In this article, we will dive deep into the reasons why this trend of renting over buying a house has been popular among millennials.

Why Renting Can Beat Buying for Millennials

In the recent few years, millennials have been renting more than buying houses. This may come across as a decision made due to financial constraints. However, the reason behind this trend is quite the opposite. Here are some of the reasons why renting homes can beat buying when it comes to millennial.

1. It’s Budget Friendly

With many students opting for student loans, the amount of debt has been increasing manifold. The majority of the population of millennials has student loans with different banks leading to a considerable amount of debt. In an attempt to reduce further debt, they prefer renting over buying a house. Renting requires marginally lesser capital when compared to buying a home or even a piece of land.

When you rent a home, the main expenses incurred are the advance payments, security deposit, utility bills, home rent, and maintenance fees. However, to buy a home, a large amount of capital has to be invested. Many people also opt for home loans to buy a house. Opting for a home loan will only further increase debt.

2. Settling Down Later in Life

It has been observed that millennials tend to marry later in life and settle down with a family much later. They are 10% to 20% less likely to get married in their 20s when compared to their parents or relatives. So, the need to buy a home reduces. In addition, millennials are also less likely to have children at this stage of their lives. Supporting their goal-oriented lifestyle, renting can be a more convenient and cost-efficient option.

It would be more reasonable for millennials to buy a house once they have settled down in life with a family as a permanent home turns into a necessity rather than an accessory. As a result, many millennials refrain from buying homes as it would only lead to additional costs and cause hassle while moving across cities or countries.

3. Shift Bases Often

Before the pandemic, millennials often moved to different places for their work. Apart from work, the travel habits of millennials led to them moving across cities and countries on a frequent basis. This is one of the reasons why millennials are considered to be more mobile than other generations. In the next 10 years, 73% of millennials plan to move which demonstrates a mobile lifestyle compared to other generations.

With such frequent travel, it can be cost-cutting to rent rather than buy a house. It can also avoid the hassle of buying and selling a home. In addition, this allows millennials to avoid transporting their belongings such as furniture and other valuable items to the places they move to.

4. Lesser Maintenance Efforts

When you buy a home, there is plenty of responsibility that comes along. For instance, you would have to make sure that the place is maintained in a good condition, the repair needs are met, etc. In addition, it is important to perform regular maintenance checks to make sure that all facilities are maintained properly. This process can be time-consuming.

By renting a house, the maintenance is typically handled by the landlord. This reduces the amount of hassle for millennials. If these maintenance needs are left unattended, it could lead to severe financial stress in the future as the expenses incurred for these damages would be high. With regular maintenance performed by the landlord, these expenses can also be cut down.

Conclusion

Millennials have started renting homes rather than buying them for plenty of reasons. Renting can be extremely beneficial from a financial perspective while also proving to be a more convenient option. In addition, it is also wise to opt for home insurance India as it can help cover costs incurred due to repairs and damages.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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