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The media often portrays home ownership as part of the American dream. A man’s home is his castle, after all. However, purchasing a home is a big decision, and families considering it should think it all the way through before they sign that mortgage agreement. In some cases, renting an apartment is the wiser choice. Before you make your next move, consider the following factors.
Deciding Between Renting And Owning
Cost of the Keys
Keys are such little things, but they can represent hundreds or even thousands of dollars spent. The upfront cost of buying a home is often significantly more than that of renting an apartment. A typical down payment on a house is 20 percent of the home’s price, and homes average around $200,000. Not all mortgages require a down payment, but experts recommend that prospective buyers be able to make one.
When you rent an apartment, you often have to pay a small application fee, a security deposit, and the first month’s rent (and sometimes the last month’s rent as well). If you have furry friends, you can expect to pay a pet fee. Even if you’re renting a place in a new building in a popular neighborhood, you still save money over buying a house.
Month to Month Expenses
Usually, when you budget for an apartment or house, the first thing you think about is the monthly rent or mortgage payment. However, there are other things to take into account with each type of living arrangement:
- Utilities: Many apartment complexes cover water, sewer, and garbage for tenants. When you own a house, you pay for each.
- Lawn care: Apartment tenants do not have to worry about maintaining a lawn mower or hiring a yard service to keep their outdoors looking spiffy. Homeowners, on the other hand, do.
- Laundry: Most homeowners have the advantage of a fully stocked laundry room with a washer and dryer. Apartment dwellers, however, may need to budget for trips to the Laundromat or their complex’s coin-operated machines.
Other Budget Considerations
Each type of dwelling comes with a few extra financial considerations that you must think about before you make your choice.
At the end of the year, you’ll see tax benefits from home ownership – something that doesn’t come with living in an apartment. However, houses come with more surprise expenses than apartments. An apartment landlord takes care of repairs and maintenance, but homeowners have to deal with such issues on their own. The costs can add up quickly.
If you sign a lease for an apartment, it is unlikely you will have to worry about any surprise expenses unless you violate the terms of your rental agreement and have to pay a fine.
Time and Place
Love a certain neighborhood and want to spend a long time there? Then you may want to buy a house; it is a long-term decision and can root you to one spot for decades. This doesn’t mean that moving isn’t an option for you; you could rent out your house or try to sell it, but renting your house to a stranger is risky, and selling can take months.
If you hesitate to commit to living in a place for more than a year or two, look for apartments, which give you the freedom to move virtually any time you want. This freedom helps you adjust quickly to changes in your lifestyle. If you score a new job or add a new member to the family, you don’t have to worry about being trapped in a house that doesn’t fit your new circumstances.
Another advantage to renting is that it lets you try out a neighborhood and really get to know its personality before you think about buying a house in the area. For example, if you live in Los Angeles and want to escape the craziness of the city, you might look at San Clemente apartments so you can test out a town that is close to LA with a quieter atmosphere.
Final Thoughts
Ready to pack your boxes and settle into new digs? You have a world of options in front of you, but the first choice you have to make is whether you want to rent or buy. Consider the above factors before you move ahead with your moving plans.
The post Home or Apartment?: Choosing The Right One For Your Budget & Lifestyle appeared first on MoneySmartGuides.com.