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There are many possible reasons for renting instead of buying, for example:
- In many jurisdictions (including India, Spain, Australia, United Kingdom and the United States) rent used in a trade or business is tax deductible, whereas rent on a dwelling is not tax deductible in most jurisdictions.
- Financial inadequacy, such as renting a house when one is unable to buy it. One may not wish to pay the full price that ownership would need, allowing for smaller payments over a specified period of time.
- Reducing financial risk due to depreciation and transaction costs, especially for real estate which might be needed only for a short amount of time.
- When something is needed only temporarily, as in the case of a special tool, a truck or a skip.
- When something is needed that may or may not be already owned but is not in proximity for use, such as renting an automobile or bicycle when away on a trip.
- Needing a cheaper alternative to buying, such as renting a movie: a person is unwilling to pay the full price for a movie, so they rent it for a lesser price, but give up the chance to view it again later.
- The tenant may want to leave the burden of upkeep of the property (mowing the lawn, shoveling snow, etc.) to the owner or his agents.
- There is no need to worry about lifespan and maintenance.
- Renting keeps off-balance-sheet the debt that would burden the balance sheet of a company in case the property would have been bought.
- Renting is good for the environment if products are used more efficiently by maximizing utility rather than being disposed, overproduced and under utilized. (Source: Wikipedia)