Make savings your priority when renting

When renting a flat or a house, a lot of people feel they are simply throwing money away as they are not really investing in anything for them or towards their own home. Thanks to the global economic crises and the downturn in the housing market, more young people and first time buyers are struggling to actually get their foot on the property ladder and not only come up with the deposit, but find a bank willing to offer them a mortgage.

As more of us have to rent instead of buy, in recent years property experts have seen a boom in the number of people looking for accommodation to rent in and around city centre locations. It is not just young professionals looking either, as many families are living in rented accommodation too.

In response to the question of whether they would prefer to own their own property or continue to live in rented accommodation, most people would choose to be able to own their own home. For some it may never happen but for the rest, it may simply take a little bit longer - but by taking advantage of higher savings rates on some savings accounts and fixed rate ISA, there is a way of using renting to your advantage.

When renting accommodation, you should see this as a great opportunity to make some savings, perhaps by utilising ISAs, that can be used towards a deposit for your own house one day. This does not necessarily mean having to just make do when it comes to finding a property to rent. These days, most of the properties available to rent are in much sought-after central locations with luxurious interiors and off road parking. These are not being sold simply because there is something wrong with them; there will be many reasons landlords cannot sell, or are choosing to rent out the properties instead of selling. The property market has been slowing down in recent years for one, while many homeowners have realised there is a higher demand for rented accommodation these days than for properties to buy.

If you do find yourself having to rent, use it to your advantage and rent a property in an area you may not necessarily be able to afford once you have saved enough to buy. Choose somewhere closer to work so you can make savings on travelling into the office, for instance, or choose a flat block that offers free gym membership to its residents. The more money you are able to save and put into a high interest savings account, the closer you will come to being able to afford to pay a deposit on that house you want to call your own one day.

When renting, the landlord is responsible for making all repairs to the inside of the property such as repairing the boiler if it goes or replacing the faulty washing machine. If you owned your home, you would be responsible for all these charges. So, when living as a tenant and not a property owner you will not have to fork out for huge bills to have things like this fixed or replaced. On the other hand, if the shoe was on the other foot and you were in a position where you own the property, there would be nobody there to pass the buck to and you would have to cough up the cash. When you own a property it is vital to take out building and contents insurance to protect yourself and your home if anything does go wrong. As a tenant you will not usually have to pay for this as it is often included in your rent, so this added saving can be paid into your ISA at the end of each month.

When looking at most city centre flats and properties to rent, you may notice a lot of them have double or triple glazing installed. Not only will this help block out noise from the busy road below, this is a great way of making the property more eco friendly as less heat will escape through the glass windows. Paying less money on fuel bills will certainly be an added bonus when trying to save for a deposit on your own property, so this is another great way to make the most of renting.

The most important thing to realise is renting is not a bad thing. For some people it may even be a lifetime choice as they realise they would much rather spend their savings on a round the world trip than saving for a deposit on a house. For others it is a great way to focus on your finances and making great savings while they still can. In addition, for those who are unsure about where they want to settle down or for those still focusing on their career path, renting and saving for a few years provides a great focus for them as they can search for the perfect job and location before deciding which property warrants handing over all that hard-earned and saved cash for. It is a decision that should not be taken lightly, so renting and saving can provide that perfect breathing space before taking the ultimate plunge into the property market.