For most individuals, the decision to purchase an apartment is quite a dilemma. Although investing your financial resources in a new apartment is one of the most significant financial investments you will ever make, it can be daunting.
Should you buy an apartment? Or renting is the way to go? To determine which is right for you, here are some factors that you need to consider:
Firstly and most importantly, figure out your finances. While it is easy to compare rent pices, analyze if you can really afford to buy an apartment. When buying an apartment, the major costs to consider include down payment, mortgage interest payments, insurance and property taxes – among others.
However, sometimes, especially when mortgage rates are low, renting is more expensive than buying an apartment.
Simply put, the decision to buy or rent an apartment really boils down to your financial situation. Of course, this includes your savings and credit score. Despite the fact that a number of loan programs offer borrowers with a down payment of 3.5 percent or less, you will still need money for making a down payment and deposit when buying an apartment.
Once you buy an apartment, there are other costs to cover to maintainer its long term value. From floor repairs to window coverings, budget a certain amount for apartment repairs and maintenance. On the contrary, the maintenance costs for a rental apartment are fixed, and are paid every month. Typically, you are required to make the payment along with the rent.
Buying a new apartment is a lifelong commitment. Before investing your funds in a new apartment, you need to make sure that it meets all your requirements. Hence, it is crucial to select an apartment in the right neighborhood and environment. Moreover, does the locality offer adequate facilities and amenities, such as parking?
Renting an apartment, on the other hand, typically provides a wide variety of amenities to rent owners. Having said that, this depends on the type of apartment you choose to live in.
The main advantage that comes with a renting an apartment is that you have more flexibility to move to another place. Selling an apartment is more expensive and time-consuming, depending on the market conditions.
Owning an apartment comes is a financial investment. It comes with a long-term value that you can use to either buy a new property or fund your retirement. If you are looking to long term investment then you should buy an apartment.
Do you have a long term plan? Do you plan to change jobs or move to another state in future? If so, you are better off renting an apartment.
At the end of the day, buying or renting an apartment is a personal decision. No matter what you choose to do, always remember that where you reside plays a fundamental role in the quality of life. Make sure you weigh both the pros and cons of both options before making the move to a new apartment. As a rule of thumb, choose a housing plan that meets your current and future needs, budget and lifestyle.