Home Buying Vs. Apartment Living

The decision to buy a home or continue renting is a tough one for many people. There are clear benefits to both options. Before considering a purchase, it's wise to weigh the pros and cons of both choices to make an informed decision.


The qualifications for renting an apartment are less strict in comparison to buying a home. Yes, landlords will review your income and employment history to see if you qualify, and some will even review your credit history. However, apartment landlords are more flexible with regards to credit history, and as long as you have income to back up the rent, you can qualify for an apartment with poor credit. It's quite the opposite with mortgage loans where lenders typically prefer scores of 680 or higher. Plus, a bankruptcy or foreclosure in your recent past can stop the loan approval process.
  
Home Maintenance

Apartment living is attractive to many because tenants aren't responsible for repairing or maintaining the exterior or interior of the property. Moving into an apartment means that you're only responsible for the rent and the utilities. If an appliance breaks or if the property needs a new roof or windows, it's the responsibility of your landlord to make the repair. It's a different story when buying your own home. You have to pay out-of-pocket for any repairs or upgrades to the property.
   
Cost and Equity

Depending on your location, it can be cheaper to rent an apartment. However, factor in yearly rent increases, and after a few years, the rent on an apartment can climb higher than the mortgage on a house. Fixed-rate mortgages do not increase with time, and as you pay down the mortgage balance, you acquire equity in the house. Mortgages are an investment where you can sell the property and make a profit. Paying rent year after year is often compared to throwing money away because you don't earn equity or benefit financially from rent payments.
   
Flexibility

There is a certain measure of mobility or flexibility associated with renting versus buying a home. Renting is ideal for people who don't like staying in the same place for too long. Apartment landlords typically do hold tenants to a lease agreement, but after the 12-month lease expires, tenants are free to leave and move into a new residence. What's more, some apartments allow month-to-month leasing. Moving after purchasing a home isn't as easy. Owners have to find buyers or renters for the property, which can take months or longer depending on the real estate market.