Comparing renting to buying a home is among the most common discussions in the world of personal finance. While there are supporters on each side, the reality is that it is a very personal decision and will depend on a wide range of circumstances.
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There are some expenses that homeowners should focus on. There are also fees that renters have to worry about that homeowners don’t. This article will go over which bills you don’t have to worry about. Let’s examine five bills you’ll never have to pay when you own your home.
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Renters insurance
“Renter’s insurance can cover many different scenarios and property types,” said Sherri Lindsey, an insurance agent with COUNTRY Financial. “However, a basic policy will provide coverage for property, liability, and living expenses. Most policies include additional options to adjust deductibles, replacement costs, and insure valuable items.
If your unit becomes uninhabitable due to a covered loss, your renters insurance will help cover the additional expenses. Liability coverage will help protect you if a guest is injured while visiting your venue. It is important that you read your policy to be aware of what is and is not covered.
“Renters make the mistake of thinking that landlord insurance will replace their personal belongings,” Lindsay said. “The landlord’s policy will only cover structural damage to the building due to hazards such as fire or wind. The tenant’s personal belongings are not covered under the landlord’s policy.
The amount you’ll pay for renters insurance depends on your coverage, your claims history, and the location of the unit. Depending on where you live, you can pay anywhere from $12 to $31 per month for renters insurance.
On the other hand, a homeowner will never have to get renters insurance. They will have to get a homeowners insurance policy to cover the structure and personal property, but they don’t have to get a separate policy to protect their personal property.
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Pet fee or pet security deposit
Landlords may charge you a fee if you have a pet to reduce the risk because they may damage the unit. Many landlords are reluctant to rent to tenants with pets due to concerns about potential damage. As a renter, you will likely have to pay a pet security deposit before you get the keys to your home.
Although you will likely get your pet deposit back if your pet doesn’t cause any damage, there are no guarantees this will happen. The owner will check the unit when you leave to see if your pet has caused any damage. Issues such as torn carpet, pet stains, damaged doors, etc. can allow the owner to use part or all of the pet deposit on repairs.
Each state has different laws about how much a landlord can charge for it. The good news for renters is that you cannot be charged for a service animal under the federal Fair Housing Act. The better news for homeowners is that you don’t have to worry about this if you have pets – they can join your home for free.
Regular security deposit
When you rent a place, you will usually be asked to pay a security deposit to the landlord. This deposit is traditionally equivalent to one or two months’ rent as a form of deposit to force the return of the unit in decent condition as stipulated in the rental agreement. Upon departure, the owner will inspect the unit to determine if there are any damages that require repairs. The owner can then use part of the insurance amount to cover the damages. You may lose your entire insurance amount if the damages are severe enough.
As a homeowner, you don’t have to worry about paying any security deposits since you own the unit. As a renter, this is another bill you should focus on. With the current national average rent at $1,967, that’s no small sum to hand over before you get the keys.
Parking fees
You always have a parking space included when you own your own house or apartment. However, as a renter, you may have to spend money on a parking space because the landlord may not include it in the lease.
Parking fees depend on the location of the unit, and larger cities are known to have steep costs. As a homeowner, you will likely have a designated spot as part of your property ownership or that will come with a driveway or garage that you can use for parking.
Cleaning fee upon checkout
When you move out of your rental, you may have to pay out of pocket for a cleaning fee to ensure the unit is returned to its original condition. The amount you have to pay depends on the size of the unit and what your lease says about cleanliness conditions.
If it is determined that the unit needs cleaning, the amount you pay will depend on state laws and requirements. However, you may lose a significant portion of your security deposit if the entire place needs to be renovated. When you’re a homeowner, this isn’t something you usually have to think about.
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This article originally appeared on GOBankingRates.com: 5 Bills You’ll Never Have to Pay When You Own Your Home