The traditional wisdom is that buying a home is better because you can build equity. However, that’s not always true. Renting an apartment can be a great option at any stage of your life and has numerous advantages over purchasing real estate. Here are some things to think about:
Flexibility and Mobility
When you buy a house, you take out a 30-year mortgage. Typically, you suffer a large financial disadvantage if you sell within five or six years. If you aren’t settled in your career or sure that you want to stay in your current location, it’s better to rent. If you are older and expect to move to a retirement community, buying may not make sense. Most leases are one year, and you can typically buy out to take advantage of an opportunity elsewhere, move closer to family, etc.
Lower Upfront Costs
Most lenders expect you to pay a downpayment of 20%. As housing costs soar in some areas, that 20% may be out of your reach. While there are options with a lower downpayment, those options come with the additional monthly expense of private mortgage insurance, which you pay for and your lender benefits from.
While there is an upfront payment for renting, it’s a lot smaller. Most landlords ask for the first month’s rent, the last month’s rent, and a security deposit.
Maintenance and Repairs
When you own a home, you are responsible for all of your repairs and maintenance. A leaky toilet means you must track down a plumber, schedule a visit, stay home and wait for them, and pay upfront.
With an apartment, your landlord is responsible for most maintenance and repairs, depending on your lease. You can simply call them and maintenance will take care of the toilet…even if you aren’t home.
Access to Amenities
Apartment complexes typically have amenities. You will likely have access to a fitness center and possibly a pool. Many complexes also have additional amenities such as hiking trails, a dog park, a room you can rent for events, etc. These amenities are covered in your rent. You can get the same thing with a condo, but often, when you combine a mortgage and condo fees, you will pay more for the same accommodations.
Lower Financial Risk
The housing market might be very high now, but it can crash. If it does, the precious equity you have built may be worth a lot less. You could even end up underwater, owing more on your home than it is worth. Renting puts the risk of reduced property values on your landlord.
You also don’t face the risk associated with property damage. You won’t suddenly have to find $30,000 for a new roof after a massive storm blows through. While your rent can go up, you face fewer overall financial risks.
Building your Credit History
If you do plan on owning, the higher your credit score, the better. A high credit score can give you a higher loan, better terms, lower interest, and even a lower down payment.
Paying your rent on time goes a long way toward building a solid credit history and making you look like a good risk to lenders. This doesn’t just include mortgages but things like car loans. Even employers like to see a good credit score.
Community Living
Not everyone feels this way, but if you are a more extroverted type, there are definite advantages to living in a community with your neighbors, especially if there are social spaces.
Living in a community can benefit your mental health, especially if you are young, single, and striking out on your own or older and at risk of loneliness.
Overall, there are strong positives to renting an apartment rather than buying a home.
Consider Anderson Communities for Prospective Renters
Our apartment communities across Kentucky contain options for all families. We also have communities of single-family homes for families with children. All of our communities offer convenient locations close to commuting routes and shopping, generous floor plans and wonderful amenities.
Explore Available Rental Options and Schedule a Tour
If you’re ready to look for your new apartment home in Lexington or across Kentucky, you can explore our apartment options and then schedule a tour. Make Anderson Communities your home and experience all of the advantages of renting an apartment in one of our fantastic communities.
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