Real Estate Purchase Strategies – Saving for a Down Payment by Renting Before Buying

Real Estate Purchase Strategies - Saving for a Down Payment by Renting Before Buying

Whether you are a first-time home buyer, a property investor or someone looking at moving into a luxury property or a new real estate market, if you are in a position where you will have to finance the purchase, then the largest single factor limiting your purchase options is the amount cash you have on hand for a down payment. While the traditional route of saving money until you have enough for the down payment is the most common strategy, a novel approach to consider is to reduce your expenses by renting before buying. If you already own a home, selling it if the market conditions are in your favor could allow you to invest the proceeds of into a safe investment that protects your capital while offering a good rate of return. This will free up more cash that you can put towards your savings, to gain interest and get you to where you want to be financially for a down payment at a quicker pace.

Here are some benefits of renting to save for a down payment before buying:

Less Expenses

In some cases, the financial cost of renting can be significantly less than owning, therefore if you do not have a large dispensable income that you can put towards savings, this alone might be the perfect option for you. One of the greatest benefits of renting is that, if something breaks, it is up to your landlord to foot the bill. Of course, this does not count if you break something, but if something stops working such as your fridge or freezer, you can sleep happily knowing you won’t have a huge bill to pay at the end. Your rent should not change if anything needs to be fixed. And if you are having trouble getting your landlord to fix a broken appliance, here are seven ways to get around this.

Credit Score Issues

If you are in a position that a credit score is holding you back from buying that perfect home, then you’ll need some time to get that improved by reducing your expenses and improving your financial position. Renting allows you to then build up your credit rating until you have a good enough rating to make that purchase. Blueprint, Blueground’s blog for renters, has compiled a list of the best ways to find apartments with no credit check which will help you significantly in your searches. No credit check apartments are the best choice for someone with a poor credit rating or no credit. Checking your credit before you look for an apartment means you will know beforehand if you need to find a landlord who will accept you with poor credit. Blueground, in place of a credit score, guarantees its tenants’ ability to make rent by holding a security deposit and requesting a portion of the lease payments in advance. There are many ways you can rent with a bad credit score, including finding private landlords.


If you are moving into a new real estate market and don’t know what area is going to be right for you, then purchasing right away could be a bad judgement call. Many people prefer to rent first to find out if a location would be right for them. Distance from work or family and other factors play a huge part in these decisions or some people may only be temporarily living in a city due to work and may want to move in the future. Renting means you are not permanently tied down to a property and you can leave as soon as your contract with the landlord is terminated. 

Reduce Debt

For some, even good debt is very worrying prospect and high financial payments is something that they want to avoid. If you are not financially ready for a big down payment, renting can be a great option to get you where you need to be financially. Increasing a debt burden can turn a person’s life upside down and jumping into a purchase too early can lead to money problems down the road. Renting for a period of time before making a purchase is a great idea for some people as it allows a person to build up their financial reserves to be in a better position to make a purchase.


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