Apartment vs. House
I have both owned a home and lived in an apartment and I see pros and cons to both.
Which do you prefer and why?
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Answers ( 2 )
I am a Real Estate Broker in South Carolina, recently joined the Sage Board. I would like to answer your question: “Which do you prefer and why?”
Buying Trumps Renting—If You’ve Got the Down Payment. While renting can be a solid choice while saving for a down payment, recent findings show that homeownership is still the better deal. The cost of renting is rising faster than any other time in the last six years, according to the Bureau of Labor Statistics, while rental inventory stands at a 20-year low.
The recent rises in asking prices has been outpacing the increases in rents, but home buying still may make more financial sense, a new study shows. Owning a house was found to be 44 percent cheaper than renting, according to the latest study from Trulia that compared the costs of the two.
The study found that owning is less than half the cost of renting in 46 of the 100 largest metros. “Buying a home is cheaper than renting in all of the 100 largest metro areas,” according to Trulia.
Falling mortgage rates are helping to keep home buying more affordable. But depending on where you live, the difference between owning versus renting can be big or small. For example, in San Francisco, home ownership was found to be 19 percent cheaper than renting, whereas in Detroit owning a house is 70 percent cheaper than renting.
This is a great question Rose. I often hear the advice that you should always buy if you can afford it. Between building equity, the difference in present vs future value of money, and the tax benefits you can qualify for, buying a house is very often a sound financial decision. I personally bought my home as soon as I could afford to.
I would offer one other consideration when deciding if you are going to buy a home. How long do you plan to stay there? With market cycles and the transaction costs involved, if you don't plan to stay for at least 5 years, you may want to consider renting instead. This is of course very specific to your market and the rent vs home price ratio. When you buy and sell a home, the costs of agents fees, loan origination fees, furnishing the house, and preparing the house for sale, can add up quickly. Add that to the potential for prices to drop in the short term, and that can spell a large expense. If you plan on staying for a longer period, these things are less of a factor as you will have built a stronger equity position over time.