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You may think that renting an apartment is simply a waste of money. However, that is not true. There are many good reasons why your money is better spent on a rental as opposed to buying a home. Here are some things to think about before you lament writing another rent check.
You Need A Lot Of Money To Buy A House
Purchasing a house is not at all like buying a car or a new television. You have to have at least 10 percent of the purchase price upfront. On top of that, you have to have money to buy a lawn mower, new appliances and everything else that a home requires. Don’t forget that you also need to think about property taxes and things such as snow removal and lawn maintenance. That can cost thousands of dollars that you don’t have right now.
Can You Handle The Repairs?
When you rent, you can have a maintenance person replace the burnt out light or put in a new heater if the old one breaks. However, when you own your own home, you are responsible for all the maintenance that goes with it. Would you be able to afford the repairs as well as do them yourself? If not, that is going to be even more money spent on a plumber or electrician to properly make a repair.
What Happens If You Lose Your Job?
If you were to ever lose your job, you could always move into a less expensive apartment without a lot of effort. All you would have to do is find someone willing to take on the remainder of your lease. However, the same is not true when you own a home. If you can no longer afford your mortgage, you will have to find someone to buy the home while making sure that it sold for enough to cover the rest of your mortgage. Homeowners who cannot fulfill their mortgage obligations can’t just leave without taking a huge blow to their credit score and ability to ever purchase a home again.
Your Apartment Complex May Have Amenities That A House Doesn’t
Many apartment complexes have amenities such as a fitness center, dog park and playground for the kids. Unless you have a lot of money on your hands, you probably can’t build a fitness center to rival what you get for free. There is also little chance that your own yard could double as a playground or dog park that allows you and your kids to interact with other people only a few feet from where you live. Those intangibles alone are reasons why rent is not a waste of money in most cases.
Purchasing a home is always a good goal. However, you should figure out if you can actually afford your home before you purchase it. There are many costs and downsides that come with purchasing a home. Unless you can afford those costs and overcome those downsides, you should stay in your apartment for another year.
Lisa Smith once worked in the mortgage department of a major Canadian lender, and has gone on to build upon her experience. Lisa is an avid cyclist, and likes jogging and rollerblading in her spare time. She also writes articles for those wishing to improve their financial situation.
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