Renting an Apartment Vs. Owning a Home
If you're a renter who is considering home ownership, or moving from your own property to a rental, there are a lot of factors to review. Both options have pluses and minuses, and what may work for some people will not work for others. Take time to understand everything involved in renting versus owning before you make a decision.
Other People Are Reading
-
Mortgage
-
Simply put, apartments don't have mortgages. Entering into a loan contract for 15 or 30 years can tie up your liquid assets, especially if you use your savings for a down payment. However, rent prices can fluctuate from year to year while mortgages are more likely to be stable, unless you have a fixed rate. Additionally, you earn equity in your home as you pay off the mortgage, while you earn nothing from renting.
Maintenance
-
When you own your own home, you're responsible for fixing everything. If the furnace breaks or you need a new toilet, you're the one who has to hire workers and pay for the repairs. However, you are also in charge of your time line and will know who is coming in and out of your home. Landlords or property managers typically handle repairs for renters, but it can take time and may not be convenient.
-
Insurance
-
If you have a home loan, you must have home owner's insurance, and you may also need to purchase mortgage insurance. While renters may not be required to have insurance, it is a good idea to cover potential losses from fire, flood or theft. Landlords are usually not responsible for damage, especially if it was caused by you or another tenant.
Utilities
-
When you own your home, you are completely responsible for utility payments. This may include gas, electric, water, trash removal, Internet service, telephone and cable or satellite television. Rental situations vary; some tenants are charged with paying some or all of their utilities, while others may live in units where property owners cover the bills. In such cases the utilities may be worked into the cost of rent, and can be reflected in yearly rent increases.
Flexibility
-
Homeowners have fewer options than renters when it comes to moving -- they typically have to sell their house, which can take time. Renters are usually locked into yearly leases, and may have the option of subletting if they need to move before the end of their term.
-
