When you’re buying a house, the advantages and disadvantages are clear. But what if you want to buy an apartment? Determining the pros and cons of buying vs. renting an apartment is a little more subtle. There are similarities no matter what you buy. Whether it’s a three-bedroom house or a studio apartment, buying a home requires much more than closing costs and mortgage payments. Things like maintenance costs, repairs, taxes, and HOA fees might have you wondering if renting is a better option for you.
When considering the pros and cons of renting or buying a house, you’ll consider things that don’t come up when buying an apartment or condo, such as yard work and roof repair. But while the considerations are different, there are still a lot of things you’ll want to consider, so let’s review the pros and cons of renting vs. buying an apartment.
Pros of Renting
Renting an apartment means you’re free of any ownership responsibilities, such as building maintenance, upgrades, and fixing structural issues. In most cases, you don’t even have to pay for small replacement items like smoke detector batteries, air filters, and lightbulbs. Renters are much more likely to have a set of fixed costs every month, and renters don’t have to worry about emergency repair costs or hikes in property tax. Renters in an apartment community get to use all the amenities the property provides, as well, such as the fitness center, tennis courts, and swimming pool.
Cons of Renting
Renting an apartment is great when it comes to flexibility. Being able to move when your lease is up means you don’t have to experience buyer’s remorse that you might if you bought an apartment, only to realize you would prefer a different location. However, while you have the freedom that comes from not being tied to a property, you don’t have a lot of freedom to do what you want with your apartment. You’ll have to follow certain rules, which could limit your ability to have a pet, paint your walls, or even how long you can have guests.
Pros of Buying
Purchasing a home is an investment, which means you could get more than you originally paid for your apartment if you decide to put it on the market. If you have a fixed mortgage, your monthly payment will always be the same. There are no worries about rent hikes when you own the apartment. The interest you pay might even be eligible for tax deductions. And while you can’t add a room or change the overall footprint of the apartment, you can remodel the kitchen, change the flooring, or paint your walls any time you want.
Cons of Buying
When you own your home, you’re responsible for all the repairs and maintenance. And while you won’t have to worry about the outside of the structure, you will have to handle any electrical or plumbing issues that occur in your unit.
Many multifamily buildings where the units are owned by individuals also have a homeowners association (HOA), and there are monthly fees you’ll have to pay aside from your mortgage payment. The HOA fees cover building maintenance, the upkeep of the grounds, and maintenance of any amenities provided. When something major happens, for example, if the parking area needs repaved or the building needs painted, a special fee may be charged to the apartment or condo owners to cover that extra expense. Finally, if you decide you want to move, you’ll have to sell your unit first.
Keep in mind that when you buy an apartment or condo unit, you own the unit, not the building or the land. Someone else owns the land and the building itself, and while the rules may not be as strict as they are for renters, there are still rules you’ll have to follow.
What's next?
After weighing the pros and cons, you’ll have to decide which option works best for you. Renting offers great flexibility and mobility, while homeownership gives you a chance to put down roots and invest in real estate.
