Renting vs buying an apartment: which is right for you?
Deciding whether to rent or buy an apartment may seem like a simple decision, but owning an apartment comes with many hidden costs. Luckily, there are tools available to help make this decision. With these tips, you can make an informed decision on what is best for you.
The Cost of Renting vs Buying
There are many things to take into account when looking at home ownership. Some of these include earning potential, future plans, and financial benefits or burdens. Purchasing an apartment costs more right off the bat than renting. However, the recurring costs are often lower, and the long time investment can be financially beneficial. There are online calculators to help determine the financial cost of owning versus renting an apartment.
The Rules of Renting vs Buying
When renting an apartment, there are more rules, per the lease given by the landlord or property company. However, that does not mean buying is a free for all.
After purchasing your apartment, you can repaint, remodel, or install new appliances as your see fit. This also means taking on all financial burden for these projects, and dealing directly with contractors. There also may still be rules on remodeling based on the community you live in.
One pro of renting is that someone else is in charge of taking care of utilities and the general standards of the living space. Once an apartment is purchased, this responsibility passes to you, the owner. This can make renting an ideal arrangement for someone with little time for home repair. Or maybe you do not want to learn DIY upkeep techniques or take on the financial burden and responsibility of hiring people to fix things.
The Financial Benefits of Renting vs Buying
The financial benefits of buying over renting can change over time. However, monthly mortgage payments can come out to be less than rent.
Keep in mind that buying an apartment can also be an investment. The potential of making money down the road is one of the biggest benefits of home ownership. With renting, this is not a possibility.
Home Ownership Planning for the Future
In the end, it depends on what your long term goals are. If you plan on setting down roots and growing financially in one place, buying is probably the best option. If your life is uncertain, and your schedule hectic, stick to renting for the time being.
Furthermore, if you have hopes of getting a better job or adding people to your family, it might not be the best time to buy an apartment, no matter how much financial sense it makes at the time. Think about the location and whether you want to lay down your roots there.
Some neighborhoods provide necessities for one demographic, but what is essential can change over time. For instance, the need for good brunch places may give way to the need for daycare. Before deciding whether owning or renting is right for you, think about where your life may be in a few years’ time, and how easy it will be to unload an apartment. After all, finding a new renter, or simply ending your lease, is a lot cheaper and quicker than finding a buyer.
Finally, research the area you are interested in renting or buying in. The value of surrounding properties will affect the cost of your apartment, no matter what. Whatever you decide to do, make sure you are informed on both options.