People wouldn’t buy homes if there was no benefit. However, owning a home isn’t right for everyone. If you travel frequently, have an active social life, are moving into your first place, or are simply not looking to take on a lot of responsibility, renting an apartment may be your best option.
Continue reading to learn if it’s better to rent or buy.
Renting vs Buying
No Maintenance Costs or Repair Bills
Apartment living is easy living. When you rent a property, your landlord is responsible for all maintenance, improvement, and repairs. If an appliance stops working or your roof starts to leak, you call the landlord, and it gets fixed. Homeowners, however, are responsible for all repairs and maintenance. While hiring a handyman is an option, repairs and renovations can add up quickly.
Access to Amenities
Have you always dreamed of owning a pool? At many mid-scale and upscale complexes this amenity comes with no additional charge to tenants. You’re able to relax by the pool without having to spend the time and money maintaining it. Other luxurious amenities such as a fitness center, club house, tennis courts, and basketball courts may also be available, no fees required.
No Real Estate Taxes
One of the major benefits of renting vs owning is that renters don’t have to pay property taxes. Real estate taxes vary by the county you live in and can be an additional couple of thousand a year. Property tax is determined based on the estimated property value of the house and the amount of land. With newly built homes getting larger and larger, property taxes can be a significant financial burden.
No Down Payment
The upfront cost of renting an apartment is far less than purchasing a house. While renting requires a security deposit, it can’t be any more than the monthly rent. A down payment is typically 20%, meaning to purchase a $200,000 home you need to have $40,000 before moving in. If you don’t have the money for a significant down payment, renting may be the best decision to make.
Flexibility to Downsize
By renting, you have the option to downsize into a more affordable living space at the end of your lease. This is particularly enticing for retirees who want a less costly, smaller alternative that matches their budget. When you own a home, it’s much more difficult to break free of an expensive house due to the fees involved with buying and selling a home.
Lower Insurance Costs
While homeowners need to have a homeowner’s insurance policy, renters only need a renter’s insurance policy. This policy costs between $12-$20 a month and covers furniture, computers, valuables, and more. Homeowner’s insurance ranges between $25-$80 per month.
Lower Utility Costs
Homes certainly vary in size, however many are larger than an apartment. The larger a space, the more money it costs to heat and cool. Electric bills will likely be higher in a house compared to a rental as well. Rental properties typically have a more compact and efficient floor plan making them more affordable to heat and power than a home.
Is Renting or Buying Right for You?
Owning a home may be beneficial for those looking to live in one place for a long time. However, for those who aren’t looking to take on that responsibility, the costs of upkeep, and the property taxes, renting may be a better option.
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