There are many reasons people rent an apartment as opposed to buying one, and also many reasons why people buy apartments after having rented for a while. Renting is perhaps the easier decision to make. You'll certainly need somewhere to live, and though you may sign a rental agreement for perhaps an entire year, it's not as big of a commitment as buying an apartment, because once that year is up, you pack up, move out, and hopefully get your security deposit back. When you've bought an apartment, it's not that simple, because well, it's yours and as a result, pretty much everything that happens within the walls is your responsibility.
Here are the pros and cons of renting an apartment:
- You have less responsibility. If something goes wrong, like a leakage or random power outage, the first person you call is your landlord as it is his or her responsibility to take care of it.
- You won't have to take out a loan. Renting an apartment is the easier option financially as you'll only be thinking about paying month to month and you won't be subject to the hefty down payment that home owners have to pay.
- Flexibility to invest your money elsewhere. If you're interested in the stock market, renting will allow you to have more disposable income that you can invest as you please.
- You're better prepared for unpredictability. Because nothing in life is certain, there is the possibility that somewhere down the line you may be out of work, or may have to take a pay cut. Renting means that you aren't stuck. There are less penalties in not being able to pay rent than there are in not being able to pay your mortgage.
- Regardless of how long you've been renting your apartment, you'll never own it. Some may see this to be a waste of money in the long run, especially when your residence has stayed the same for a considerable amount of time and you have no plans on moving.
- No pets. There are some rules that landlords set, like not allowing tenants to have pets. Because you are renting, you'll have to abide by the rules set in the contract you have signed.
- Possibility of eviction. Once your lease is up, your landlord doesn't have to extend it and thus you may have to find another apartment.
Pros and Cons of buying an apartment:
- Once your mortgage is paid off, the apartment will be yours.
- Security for retirement. You'll have somewhere to live, and no rent or mortgage to pay, once everything has been paid off.
- You can do as you please. If you want ten dogs and three cats, the decision is up to you. You can make renovations where you see fit without getting backlash from a landlord.
- You can rent your home for some extra cash.
- It's a great investment that can yield great results.
- Large down payment that will possibly require you to have to take a loan.
- If the housing market gets rocky, you may be looking at losing quite a bit of money.
- If something breaks, it's your responsibility to fix it.
- Hefty mortgage in an unpredictable economy.