Difference between Owning A Home and Renting An Apartment
For many people owning a nice home is the pinnacle of achievement, and many work their entire lives in the pursuit of this very goal. It isn't easy to save up enough money to make a down payment on a home however, and much harder still to pay for one outright. It is for this reason that many people opt to rent an apartment instead, which has its own benefits, as you will see in this comparison article.
Cost
As many people are well aware, renting an apartment is actually a more cost-effective solution than paying for a home–at least for the short term. Rental rates for apartments are generally lower than monthly mortgage payments, and if you choose an apartment in an area with several vacancies, the costs may be even lower. In addition, you may also be able to get a much bigger or much nicer apartment in a better part of the city if you rent, compared to buying a home.
Most people who opt to buy a house also have to deal with a size-able down payment, which renters will not have to worry about. In addition, there are also numerous other costs to deal with when buying a home, such as closing costs, miscellaneous fees, costs for legal counsel, taxes, insurance and escrow, none of which renters have to deal with.
Taxes
Most people who plan on owning home hope to catch a huge tax break, although this doesn't always come about. If you purchase a home with an annual mortgage interest rate that is lower than the deduction rate, you won't be able to take advantage of this benefit. When you rent an apartment however, you will always have tax deductions to count on, since a sizable portion of your rental costs can be claimed against your taxes every year.
Flexibility And Options
One important reason why many people opt to rent an apartment instead of owning a home is flexibility. When you rent an apartment, you can basically pack up and leave anytime you want, since you don’t have a sizable investment tying you to one place. In addition, you also have a lot less to worry about with regard to prices in the housing market. All you have to worry about is whether or not you can afford the rent, and if you can then you are home free.
Of course owning your own home means you can do whatever you want with it, whether it is to build an extra room or to convert a den into a play area. Such benefits are obviously not available to renters. The biggest draw towards owning a home has to do with achieving the American dream and staking one’s claim as a successful adult. Raising a family in one’s own home is advantageous in innumerable small ways.
Similarities and Differences
Owning Home
- Cheaper in the long run
- You end up with a property that is yours
- Mortgage payments can be high
Renting Apartment
- Monthly rental costs are often lower than mortgage payments for similar units
- A lot more flexibility with regard to moving out and/or relocating
- Rent can be deducted from taxes
