Apartment living may seem more expensive in the long run than buying a home. Who wants to pay off a landlord indefinitely, most likely at an increasing rate over the years, when you could simply own your home and stop worrying once you’ve payed off the house?
Well, for starters, for the first five years of home ownership, you are simply giving away your money to a bank. Nearly one-third of all home buyers move within five years before they start building any real equity, and then you have to start over from the beginning. As a homeowner, your mortgage may remain constant, but other costs, such as maintenance, insurance and property taxes can go up significantly every year — and if you have an adjustable-rate mortgage, your mortgage payment itself can increase. Starting to sound a little less cushy to own a home?
Those that rent an apartment save money in a variety of other ways, whether it’s a loft apartment or occupying a city apartment in a complex. Apartment living may not be as glamorous as owning a nice big house, but it cuts down on the costs of exterior maintenance significantly. Depending on your arrangement with your rental property’s management, you may enjoy 24/7 site maintenance. Likewise, renting enables you to avoid investing in a depreciating asset (a house), to the point where many renters save an average of $560 a month relative to homeowners.
Apartment living may not be everyone’s idea of a good time, but in many ways, it is a more secure and lucrative financial proposition than home ownership, particularly when you take into account the fact that most homeowners receive no annual tax benefits from owning a house. Even the best luxury apartments may be less expensive in the long run than making the investment in a home and going through all the struggle of putting together the down payment, taking out a mortgage, etc.
Although owning a home may seem like the dream to many people, renting can be much cheaper and more sustainable in the long run. Chime in with your thoughts and opinions in the comment section below.