Should I Rent an Apartment or Buy a House?

Should I Continue to Rent or Buy?

The decision to buy a home or continue renting can be overwhelming. Below is a list of considerations to help you decide which option is best for you.


Less Commitment:

When renting either an apartment or house, you can enter into a lease for a time period that best suits you, whether it be three months, an entire year, or even longer. Either way, at the end of the lease period you have the option to leave or renew the lease. Home ownership, on the other hand, typically requires a much longer time commitment. This is especially true if you’re taking on a mortgage to buy the house (as opposed to paying all cash): mortgage terms are generally as short as 10 years and as long as 30 (though you are free to pay it off faster, if you can). And when it comes time to move, it is generally easier to move between apartments than it is to sell your home and buy a new one


Renters usually don’t own the appliances in their home or apartment. This means, for example, that if the hot water heater bursts you’re usually not on the hook to pay for damages or the cost to replace it. Maintenance-free living can also apply to minor things such as a clogged sink, which might not seem like a big deal, but at the end of the day still cost time and money to fix. Renters are also usually not responsible for vetting and hiring professionals such as plumbers or electricians who fix any issues, while homeowners are generally stuck solving (and paying for) all these problems themselves.


The average homeowner pays $109 a month for homeowner’s insurance, but depending on the size and age of your home (among other factors), you could end up paying much more. Most homeowners end up paying around 1.91% of their household income based on the average premiums and median household income. This is compared to the average cost of renter’s insurance which is just $15 a month. Homeowner’s insurance is not optional, but what’s more, it might not even cover certain damages to your home, such as flood damage, meaning you could be on the hook for major repairs

Property Tax:

If you continue to rent an apartment you do not have to worry about paying real estate taxes. As rent prices fluctuate you have the option to move to a less expensive unit, but you cannot do this with property taxes unless you want to move to a different city, county, or state. Your real estate taxes pay for things like the public school system, parks, and full time fire department, all of which can significantly increase your property tax rate. Not only is property tax something to consider, but so are homeowner’s association fees. HOA fees are a monthly payment made by homeowners to pay for amenities or property maintenance.


Mortgage Rates:

A point to highlight if you are thinking about continuing to rent is mortgage. Your mortgage payment, while it can last 10-30 years, may still end up costing less each month than a rent payment for an apartment. A mortgage is also a fixed payment meaning the monthly amount will not change (unless you choose to refinance), whereas rent tends to increase each year. Also, even though renters may have less upfront costs, a homeowner may make up for the closing costs and break-even after only 5-6 years of their purchase – meaning in the long run home ownership may save you money. Not to mention you may qualify for a tax deduction of your mortgage interest if you itemize deductions on your tax return.


While the idea of not having to pay for maintenance might sound appealing, you generally have no freedom to make a rental property feel like home. However, when you actually own the home you are obviously free to make upgrades, knock down walls, and do whatever you want to make the home yours. You also have the ability to be a pet owner without the restrictions of an apartment.


Making any payment on time is beneficial to your credit score, but especially the payment of a mortgage. A mortgage is an installment loan, which is different from paying off credit cards or making rent payments. While in a sense paying your mortgage is the same as paying rent, rent does not contribute to your credit score unless it is reported, because it is not a loan, unlike with your mortgage payments you simply pay them and your credit score benefits.


Many people consider homeownership an investment. You can keep it up to date and modern so that it continues to appreciate in value. The home can also be used as a rental property whether that be a portion of the home or the entire property. In recent years it has become very popular for people to want to rent through sites such as Airbnb, rather than staying in a hotel. This can be especially beneficial if you go away on the weekends or for long periods of time or if this is your second home, because you can rent out the space for some extra cash.

It is important to remember that everyone is at a different point in their life whether it be starting a family or moving to a new city, so no matter why you are making this decision it is important to look at all the factors. Both buying and renting have their pros and cons. Hopefully the information provided will help you decide which is best for you.

Buyer’s vs seller’s market key point:

This is crucial to take note of especially when you’ve made the decision to buy. Certain markets will cause rent prices to increase or for bidding wars to occur. Once you’ve made your decision look into the market to decide if you’re ready or if you’d rather wait until it changes. If you would like more information about a buyer’s vs a seller’s market check out our article “Buyer’s or Seller’s Market”.

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