Why Rent?

When deciding whether to rent or buy, there are a few factors that benefit renting rather than buying. 

Risk: Part of the profits that landlords take from renting is essentially insuring the renters against risk. If a tenant wants to live somewhere for a year, and they buy a house and the roof gives out and the HVAC dies, they pay a huge amount of money for what amounts to a one year rental. By renting, you don’t need to worry about the costs of the large projects or the risk of something going wrong. 

Credit/Capital: In some cases, poor credit and/or a lack of funds to convince banks to loan large amounts of money are a barrier in purchasing a home. If you don't own a house and need to live in one, but can't convince anyone to loan you money to do so, you need to rent. Landlords have good credit and access to capital, and effectively lend out both of those as a service to tenants. This can give renters time to build credit and save for a down payment before making the jump to be a homeowner. 

Flexibility: If you only want to live in a city, or even a particular part of a city, for a short amount of time, buying a house makes little sense - buying and selling houses comes with large transaction costs and effort. You may need to commit a lot of time to searching for a house, since the availability of houses for sale depends on other people deciding to sell them. When you finally do find a house for sale in an area you want, you need to compete for it. Let's say you win, now you buy the house, and that comes with significant fees related to the acquisition of a loan, inspections, etc., not to mention any repairs that might need to be made. These can and do range in the thousands of dollars per transaction. And then when you sell the house, you'll often need to pay significant transaction costs to a realtor to assist in selling it. The cost of buying and then selling a house is often in the range of several percent of its value. If you want or need to live somewhere for periods shorter than a few years, you will likely lose money on the house, even without considering maintenance. Landlords provide the ability to up and leave without incurring those additional costs.

There are other benefits, like convenience of not having to figure out home repairs, not spending any time or effort on anything home related, and mitigation of liabilities, but risk, credit, and flexibility are three of the main benefits of renting rather than buying.