Over the years, the country has seen a decline in homeownership, and a steady rise on apartment renting. The rise on apartment renting may be caused by socioeconomic factors on the large scale, but the choice between homeownership and apartment renting is still a personal one. Both have their pros and cons, but here I will show you why apartment renting is the cheaper choice.
Renters pay a minimal down payment for an apartment.
To own a house, the future homeowner must pay a hefty amount of money for the down payment, which is some percentage of the total price tag, and closing costs, which include appraisal, inspection, taxes and insurance which usually ranges from 2% to 4% of purchase price. Renters, on the other hand, will just have to pay for the security deposit and first month’s rent, which is way much lower than a down payment for a house.
Renters can move in immediately, without having to worry about repairs.
There are houses for sale that will need repairs and some home improvements. And the future homeowners will shoulder these costs once they move in. Renters will not have to worry about repairs before they move in. Repairs and finishing are covered by the landlord, before the new tenant moves in.
Upkeep and maintenance are the responsibilities of the landlord.
Bursting water pipes? The heater broke down? Call it in to the landlord. Renters do not cover unexpected but necessary upkeep and maintenance costs of the apartment. Homeownership however, requires the money, time and skill to maintain a home and manage its upkeep.
Renters have the flexibility to relocate as needed.
When a new job opportunity from another state arises, or there’s a cheaper alternative than the current apartment, renters can relocate quickly. Selling a home however, will incur more costs and effort. And sometimes, because of the time constraint, you may sell your house at a lower price than its actual value.
Renters have access to exclusive amenities of the apartment complex.
One of the perks of living in an apartment complex is having access to amenities that will be expensive to replicate in your own home. Most apartment complex or buildings have swimming pools, indoor gyms and playgrounds for the kids, which are available for the exclusive use of tenants.
Renters have 24-hour security.
Most apartment complex or buildings have a security guard on duty round the clock. And compliant to fire and building codes, they are installed with state of the art fire alarm and protection systems. Midscale and upscale apartment complex are also installed with CCTV cameras, to ensure the protection of the property and the tenants.
Renters enjoy smaller utility bills.
A smaller space equates to lower electric bills, since you’ll have a more compact space to heat and power up. Water bills would also be lower, since you will have a smaller area to clean, and with no gardens to water.
Renters pay smaller insurance.
Although landlords pay for the insurance of the apartment complex, this does not cover the properties of the tenants. It will be wise for renters to invest in a policy that will protect the contents of their apartment. No matter how you take care to be on the safe side, you can never be sure about the activities of your neighbors. Renters’ insurance, however, will be way much cheaper than homeowners’ insurance policies.
Renters do not pay Real Estate Taxes.
This is one obvious benefit of renting. Real estate taxes are calculated based on the evaluated value of the property, and with homes getting larger and larger, property taxes can take a toll on a family’s budget.
There are many economic benefits to renting, but that is not to say homeownership doesn’t have its perks. It will still boil down to one’s situation and needs. Weigh in, not just the financial aspects, but also the non-financial factors. Make a list of pros and cons. A big choice cannot be decided overnight. It requires a lot of thinking and research. Good luck!
The Lofts of Columbia offers upscale apartments in Columbia, MO.