If you are planning on moving to a new apartment, the main question to ask yourself is whether you want to rent or buy. There are benefits and drawbacks of renting apartments, but you will also find an equal amount of benefits and drawbacks to buying. Here are some of the different things to consider before you sign a lease or jump into making a purchase.
Benefits of Renting an Apartment
There are a variety of benefits to renting an apartment as opposed to buying one. First of all, it is easier to get approved because you don't have to deal with mortgages or down payments. You simply pay the deposit and first months' rent, and you're good to go. You are also not responsible for repairs that need to be done to the apartment, such as a toilet that is leaking or an air conditioner that is not working properly. You also save some money by not paying property tax or HOA fees.
Drawbacks of Renting an Apartment
You should also be aware of the drawbacks of renting an apartment, beginning with the fact that you need to deal with the landlord. They can raise the rent, have strict guidelines about smoking inside or having pets, and have restrictions with how many people live in your apartment. While some of these restrictions also exist in community-owned properties, even if you own the apartment itself, the guidelines tend to be stricter when you are a renter. Also, you often cannot change anything in the apartment, such as painting your bedroom or getting new carpet.
Benefits of Buying an Apartment
One of the bigger benefits to buying an apartment is that you may end up saving money in the long run. In many cases, your rent is going to be higher or just as high as your mortgage, but when you own the apartment, the money goes toward paying off the apartment. If you decide to move, you can sell the apartment and there isn't money lost. You will also be able to make any improvements you want, as long as they are approved by your HOA. This means installing any type of faucet you want, without having to get approval from the apartment manager. In addition, any time you buy real estate, there are tax deduction benefits.
Drawbacks of Buying an Apartment
In regards to owning versus buying an apartment, buying the apartment has some drawbacks. You do need to give a down payment and get a home loan if you do not have enough funds to cover the cost of the apartment. You will also have a monthly mortgage payment in addition to other fees, like your HOA fees or property taxes. Also, if you need to move quickly, you can't just move out like you would be able to do with a rented apartment. You must either rent it to someone else or sell it first.