17 November 2017

Are You Ready to Purchase? Buying a House vs Renting an Apartment

Buying a House

Pro – Owner’s Equity
When one purchases a home, the buyer is not just buying a structure, but an investment.  Yes—even if it is the buyers first home!  Each payment the homeowner makes reduces the total balance due. Over time, the homeowner may choose to fix, or update, parts of the home, which creates appreciation (an increase in the value of an asset over time).  This added value, in combination with one’s monthly mortgage payments, allow the buyer to increase his/her homeowner’s equity – an option that renter’s simply do not have.

Pro – Doing What You Want to Your House
One of the greatest benefits of purchasing a home, is the freedom to alter it as you see fit, no matter how unusual the change. The home belongs to the buyer, so when it comes to knocking out walls, adding on new partitions, painting, or installing an in-ground pool, they buyer has the freedom to do as he/she pleases – (of course, you have to follow community rules, which means attaining simple building permits, which are very-rarely denied. We can go through this in another blog post).  Renters have absolutely no freedom when it comes to these things, their living arrangements are at the will of the landlord.

Con – Being Responsible Owners
Unfortunately, when you own your own place, you are responsible for attacking whatever chaos may ensue. If appliances break, you are responsible for fixing/replacing them, or you go without. For larger problems, let’s say that if your pipes burst, and your bottom floor is flooded out, there’s no landlord to the rescue. You have to deal with the situation in its entirety, meaning contacting all of the proper companies (i.e. property/homeowners insurance), paying the deductibles, and supervising the repairs yourself. YOU are the property owner, so YOU are solely responsible.  Obtaining good homeowner’s insurance (can’t emphasize this enough) should be a top priority before closing.
Con – Feeling Stuck
Lastly, one of the worst things that can occur to a homeowner is the feeling of being ‘stuck’. This can happen when you don’t like your neighborhood, you don’t like your house, or the value of your property falls below what you owe. Sadly, a home isn’t anything like an apartment, and there’s no easy way out. You cannot just ‘up and leave’ without repercussion. Mortgage contracts don’t havev those types of clauses, so if you want out, you have to try and sell your home, or pursue other options.
Renting an Apartment

Pro – Freedom with Limited Contracts
If you know that you are a person that lacks the commitment to purchase a home outright, then perhaps renting an apartment may be the right decision for you.  Rental contracts offer the tenant much more freedom to move at smaller time intervals (1, 6, or 12 months). These contracts give the tenant ample time to think, plan, and decide on when, and where, they would like to move. If not, you can simply sign the lease for another term. So, renters can stay put, or move coast to coast at will, it’s entirely up to them. There are so many apartments available across the US that the possibilities are quite endless.

Pro – Guaranteed Rent without Ballooning Rates
Another excellent argument towards renting is that rental rates are guaranteed for a specified term, without ballooning rates.  That means if a person signs a 1-year lease, paying $500 per month, then that price point will not change for the term of the lease (12 months). This rate cannot increase, but a ballooning mortgage rate contract can; and many first-time home buyers fall victim to these rates, as the payment amounts are much less in the beginning months of the contract, and are often too good to be true long-term. 

Con – Having to Ask Permission for Everything
Sadly, there are negatives to renting as well.  One of those negatives is that you have to ask, and receive, the landlord’s permission for every single thing that you want to do to make the apartment/home your own. This can regard anything, whether it be for the number of pets you can have (if any), to the number of guests that can walk through the door.  It can become overwhelming at times, and it can go as far as landlords restricting what you do outside the home structure, such as grilling, or having parties.

Con – Limited Freedom on Décor and Design.

Lastly, one of the worst aspects of renting is the lack of freedom on design and décor.  Sure, most rental properties allow the tenants to paint, so as long as it is re-painted white at the end of the lease term (on your dime). Most apartments start out bland to appease a neutral décor-sense, and usually require the apartment to be restored to this at contracts end.