Whether you've rented the same unit for years or regularly move to find new and interesting places to live, you likely have a lot of experience with apartments. Before you can consider major factors like location, size and distance from work and entertainment, you need to make a major decision. Should you rent or own?
Apartments for rent: The pros and cons
One of the biggest benefits of renting an apartment is the size of the market. Simply put, there are many more units available for rent than for sale in most cities and towns. If you're looking for a unique layout, an especially large or small unit or something down the block from your job, renting is often a prudent choice. Of course, if you plan on moving frequently, renting is likely your best bet.
When it comes to the financial considerations of renting versus buying, keep these facts in mind:
Pros:
- You generally pay just a few bills for essentials: rent and utilities. You don't have to worry about property taxes, closing costs or homeowner's insurance, as Apartment Therapy pointed out, which makes budgeting more straightforward.
- Renter's insurance is valuable, but optional and often less expensive than homeowner's insurance.
- Although it can vary by lease, you aren't on the hook for most major repairs or renovations. If your oven breaks or there's a problem with the roof, you don't need to worry about paying hundreds or thousands of dollars to replace it.
- You can find roommates and shared accommodations, which lowers costs, without taking on the role and responsibilities of a landlord.
Cons:
- You have less security: The property may be sold, rent may go up and other factors could force you to move after your current lease expires.
- You don't build value in a long-term asset - your rent doesn't eventually come back to you in terms of ownership.
- You have to rely on a landlord or management company to fix problems in your unit, which can mean you choose to spend your own money for convenience and expediency's sake.
Apartments for sale: The pros and cons
The benefits of owning an apartment, condo or similar property are generally similar to the pluses of owning a freestanding home, although there are some important differences to keep in mind. Ownership means you have far more freedom to modify and change the interior of your unit. On a more basic level, you can enjoy the security that ownership provides - you don't have to worry nearly as much about your building being sold and having to move.
Let's look at some of the financial pros and cons of purchasing a unit:
Pros:
- Your home is an asset and becomes a stronger, more secure one as you pay off your mortgage. You can eventually choose to borrow against its value and leverage it in other ways.
- The cost of owning goes down over time. Once you no longer have a mortgage, you're only responsible for property taxes, insurance, utilities and a few other expenses.
- You can supplement your income and reduce cost by renting out part or all of the unit, if desired.
Cons:
- The startup costs are far higher, as down payments often represent a substantial portion of the total price - 10-20 percent or more, and closing costs and taxes add up.
- The property is ultimately your responsibility, and expensive repairs and replacements for appliances, pipes and other items inside your unit can be costly.
- You can sell your apartment before your mortgage is finished, but such an effort is significantly more complicated than renting a new apartment.
Finding value with great movers
No matter if you choose to rent or own your next apartment, you can find excellent value by working with great local movers. Atlas helps people across the country move into and out of their apartments, no matter the size or location. To learn more, get in touch with us today!