In the last six months alone, the percentage of Americans who say they view home ownership as part of the American Dream has dropped from 77% to 72%, revealing the changing feelings in America towards real estate investment and home ownership. Increasing numbers of Americans are opting for a rental agreement, and only 27% of renters say they ever intend to choose to buy instead of signing a rental agreement.

Here are four great reasons why more Americans are opting for a rental agreement instead of a mortgage, and why every American should think good and hard before making a decision either way.

Rental Advantage 1: Flexibility

More and more anecdotal evidence is surfacing that shows house-stuck sellers unable to move for their careers, because they cannot sell and/or are underwater on their mortgage. Even if your home does appreciate, it takes about five years for the average homeowner to build enough equity to cover the closing costs they paid up front to purchase, which means it actually costs you money if you buy and want to move before your home has appreciated by at least 10%.

Rental Advantage 2: Real Estate Tax Deductions Are Overrated

Yes, mortgage interest can be deducted from your taxable income, but here’s a telling fact: only half of homeowners can actually take advantage of this deduction, as the other half simply takes the standard deduction. Signing real estate settlement forms and becoming a proud homeowner might be more glamorous, but signing your rental agreement forms might not be any less advantageous, tax-wise.

Rental Advantage 3: Rental Agreements Can Be Cheaper

Conventional wisdom states that money paid towards a rental agreement is money thrown away, versus money that goes towards building equity. What that logic ignores are the corollary costs of real estate investment: closing costs, maintenance, repairs, insurance, taxes, etc. Proponents of home ownership argue that these costs are offset by real estate appreciation and equity-building, but here’s a disturbing statistic: a recent study undertaken by Fidelity Investments showed that stock values appreciated about 4.6% more than real estate values, over the last forty years.

Rental Advantage 4: Rental Agreement Options Abound

With more and more frustrated sellers turning to rental agreement forms instead of selling, there are plenty of high-end rental properties available these days, for bargain rents. Indeed, some rental units that would be well out of a buyer’s price range are affordable under rental contract, meaning that tenants can lead a better lifestyle for the same amount of money if they opt to lease instead of buy a condo or house. From overdeveloped condo complexes to suburban development to luxury downtown apartments, the choices are endless – and affordable.

There are plenty of advantages to owning a home, particularly if you plan on staying there for a very long time. But for people whose careers, family lives, or finances are uncertain, opting for rental agreement forms instead of mortgage forms is a far more prudent choice in today’s consumer-driven real estate market.

Author Bio: Brian Davis is a real estate investor who has opted to only buy rental investment properties, not his residence. He helps landlords understand and comply with their state’s laws with his website, EZ Landlord Forms, which provides state-specific rental agreement forms, landlord law summaries, and many other real estate investing resources.

Category: Real Estate
Keywords: rental agreement forms, lease, lease agreement, rental agreement, rent buy