Renting an Apartment vs Owning a HomeJanuary 19, 2018
Moving out, especially if it’s for the first time, is both exciting and nerve-racking. Having your own place is a milestone in life that symbolizes freedom, independence, and a chance to start anew. The question becomes: what should you aim for? Are you looking for your own home or an apartment? These are some of the advantages and disadvantages of owning vs renting to help you decide which is better suited to your lifestyle:
Renting an Apartment
Oftentimes, renting an apartment is the first stage for young adults trying to strike out on their own. In fact, 65% of renters in the US are under the age of 35. However, people of all ages rent apartments, and overall renting is on the rise. Let’s take a look at why:
Pros of Renting
Renting an apartment has a few salient advantages. For example, renting is typically less expensive upfront. Despite safety deposits and various pet fees, renting usually costs less overall. In addition, typical wear-and-tear damages are often covered by landlords. So when the roof starts leaking, tenants can just call up their landlord and their due diligence is served.
The process is also simpler, in general, because mortgages and banks aren’t involved. Tenants must still sign a lease and abide by its constraints, but the extra legal paperwork isn’t a problem. Because of the simplicity of the process, it’s also quicker from start to finish – and easier to leave.
Cons of Renting
Although renting an apartment is less expensive upfront, the average cost of rent is steadily creeping up. Consequently, the monthly cost of renting an apartment is becoming comparable to the monthly cost of a mortgage – and that money is gone for good. There’s no investment opportunity in renting.
All landlords are not made equal. Some are worse than others, and will charge their tenants for trivial issues once the lease has concluded. Many tenants end up forfeiting their security deposits as a result. The grievance process for appealing is oftentimes arduous, and is not guaranteed to result in compensation. Being at the mercy of a landlord isn’t everyone’s cup of tea.
Renting apartments comes with a slew of unusual requirements – like no candles, barbecues, pets, or power tools. Blacklisted items are up to the discretion of the property owner, and leave tenants subject to their whim.
Owning a Home
Owning a home is part of the American dream – and it shows. Regardless of the economy, 63% own their own homes in the US. The stability and independence of owning a home is paramount for many. Let’s look at the pros and cons of owning a home:
Pros of Owning
As opposed to renting, owning a home allows significantly more independence and privacy. No need to worry about unwelcome maintenance employees and landlords dropping in unannounced. Homeowners can decorate what they want, when they want, and are only beholden to township recommendations.
Item restrictions aren’t a concern for homeowners, so they can burn candles, have pets, barbeque outside, and use power tools to their hearts’ content. Being able to have some of life’s simple pleasures is a privilege renters don’t always have.
Cons of Owning
Saving up for a down payment isn’t an easy feat. It usually ranges from 10% – 20% of the home’s total cost, and must be paid upfront. However, many banks and lenders offer loans and payment plans to ease the process.
Homeowners need to shoulder the cost of maintenance. So when a water heater malfunctions, or pipes freeze, or roofs leak, the homeowner must pay to have them repaired. Fortunately, that’s what insurance is for. Having a thorough homeowner’s insurance policy goes a long way towards protecting a home for a fraction of the cost to fix it. Alternatively, many homeowners learn a thing or two about simple maintenance over time, making fixes that much cheaper.
Buying a house means it’s tougher to leave. Homeowners accept the reality that they are putting down roots, and to go on the market would be a lengthy endeavor later on. However, that permanence serves another purpose: passing on homes for generations of housing stability.
The Bottom Line
For some extra paperwork and a little research, owning a home is the better deal in the long run. Especially owning one you create. Building a custom home eliminates many of the maintenance costs associated with buying a home because everything – appliances, plumbing, roofing, wiring – is brand new.
So if you trust your lender, and know the perfect location, building a custom home is ideal. You can cater it to your preferences and needs, without compromising. If you have any questions or comments, please contact us online or give us a call at (717) 284-4090!