Introduction to Renting for Kids and Teens
This video explains the concept of renting a home or house in a simple, concise way for kids and beginners. It could be used by kids & teens to learn about renting, or used as a money & personal finance resource by parents and teachers as part of a Financial Literacy course or K-12 curriculum.
Suitable for students from grade levels:
- Elementary School
- Middle School
- High School
The topics covered are:
- What is renting a home and how does it work
- What are the advantages of renting a home
- What are the disadvantages of renting a home
What is renting a home and how does it work?
Renting a home, also known as leasing, is an agreement where the owner of a home allows someone else to use it for a certain period of time in exchange for regular payments.
The homeowner is called the landlord, and the person occupying the home is called the tenant.
The agreement is called the lease, and the monthly payment is called the rent.
The home can be a single family home, a town house, an apartment or even a portion of a larger house. If the tenant stops paying rent, then the landlord can evict them from the home.
What are the advantages of renting a home?
There are several advantages.
- You can rent a home very quickly with minimal upfront costs or paper work. Most landlords require a security deposit and the first month’s rent before you can move into the home.
- Credit requirements aren’t very stringent. As long as you don’t have a terrible credit history, you should be able to rent a home.
- All repairs and maintenance on the property is the landlord’s responsibility – so if your air conditioner stops working or the roof leaks, all you have to do is call your landlord.
- Renting also gives you the freedom and flexibility to move, without worrying about any financial implications like selling your home or finding a good tenant.
- Tenants don’t have to pay property tax or HOA (Home Owners’ Association) fees.
- As a tenant, you don’t have to worry about the fluctuating real estate prices bringing down the property’s value.
- If it’s a furnished rental, you can save quite a bit of effort and money.
What are the disadvantages of renting a home?
Yes, there are some disadvantages to renting.
- You don’t build any home equity – the rent continues forever.
- While the upfront costs may not be high, you may still need to pay commissions and fees as high as a month’s rent.
- Since the home belongs to someone else, you don’t have much of a say in the decor or the flexibility to make home improvements as per your liking.
- Landlords can and usually do increase the rent when the lease is up for renewal.
- There is a risk of being forced to vacate at a short notice if the landlord decides to sell.
- You don’t have any tax incentives like writing off property taxes or mortgage interest.
Is renting a home the right choice for me? Who should rent a home?
That’s an excellent question, Sooper Cooper. But that’s a topic for another time…