Did you know that homeownership is at a 50-year low? With home values rising faster than incomes, many people have decided that owning a home isn’t the best investment for their money. That explains why more than 2,600 people are entering the rental market every day.
Another reason why renting numbers are on the rise is because rental myths are getting debunked left and right. Here are a few myths you may not know the truth about:
1. You’re throwing your money away.
Has someone ever told you that giving your rent check to a landlord is like throwing it in the garbage? You’re not gaining equity on a rental and, therefore, wasting your money. However, you’re paying for a place to call your home. That’s not the same as throwing your money away.
You may also not be in a position to buy a house. Maybe you need to save for a down payment. Or maybe you like the flexibility of not being tied down to something or someplace. With the housing prices on the rise, it might not be in your best financial interest to buy a home.
2. You can’t rent an apartment with a bad credit score.
It’s true that a bad credit score can make a negative impression when you’re trying to rent. But it doesn’t automatically disqualify you as a potential renter.
Most landlords agree that a bad credit score is a key indicator in deciding whether or not to approve a tenant. However, you can sometimes get around this by showing your payments and offering to pay a larger deposit. Talk to your potential landlord and come up with an arrangement to ensure he or she trusts that you’ll be a reliable tenant.
3. Rental prices are set in stone.
While most rental units have a set price on their apartments, you might be able to sweeten the deal if you can offer the right leverage. First off, knowledge is power. If you know the vacancy rate and the going rates for similar units nearby, you might be able to convince the landlord to waive the application fee, security deposit or parking fee. You might even convince the landlord to waive the first month’s payment.
Many landlords also hate turnover. So you might be able to get a good deal if you sign a long-term contract. The best thing you can do is ask.
4. You can’t build credit while renting.
Your rental or mortgage payments are likely the biggest bills you pay each month. Mortgage payments are automatically reported to credit bureaus each month, so it makes sense to have rental payments reported to credit bureaus each month as well, right? Through RentPlus, you can build your credit simply by paying your monthly rent on time. RentPlus works with your property manager to report your rental payments to select credit bureaus who then record your monthly rental payments on your credit report. It’s that easy!
So, the next time one of your friends or family members tell you that renting is a bad choice, don’t fall for that myth. Debunk it!