Rent vs Buy?….. It’s a HUGE question to ask yourself. But if you’re thinking of moving into your own living space, you’ve got a lot of options. Here’s a couple of ways to find out which one actually makes sense for where you’re at in your life.
Rent vs Buy… Should I lease a condo, buy a home, or rent an apartment?
The decision to move out and have your own living space is a pretty big one. There are going to be a lot of choices you’ll have to make, and, depending on those choices, there may be long-term ramifications that will be a part of your life for years. So which option should you choose? A lot of this depends on your situation in life, and what your current goals are. Maybe you just want to rent an apartment. Or perhaps you’re thinking of being a home buyer. Maybe you even want to lease a condo. Which one is right for you? We’ll take a closer look at each of these options.
Renting an Apartment
For a lot of people, this may be the very first choice, mostly for reasons of financial viability. Renting an apartment—or even a room in a home—is a basic living space choice. You pay rent for the month, and you’re allowed to live there. That usually entails also paying for your own utilities, such as water and electricity, although in some landlord arrangements, utilities are bundled into your rent or handled by the landlord.
Renting is the most commitment-free of the three options because, aside from a damage deposit, you don’t have any other financial obligations to meet apart from the rent itself. In some cases with apartment neighborhoods like Redwood’s Apartment Community Advantage, you may even get additional apartment rental and community amenities such as attached garages, dog parks, open floor plans, laundry rooms, and more.
Rent vs buy: Condo
A condo is essentially an apartment within an apartment complex. However, it is an apartment that can be bought and privately owned. So in many cases, choosing to live in a condo but not owning it, means you are paying rent to the actual owner of the condo. But what if you’re leasing? When it comes to condos…. Rent vs buy? And where does leasing come in?
Leasing is a long term rent. In a typical renting situation, your only obligation is to pay every month, and as long as you do that, you can live in the space. With a lease, however, you agree to pay the rent for a set period. It may be six months, a year, three years, or 10 years. Once your lease term expires, you can choose to renew the lease or leave for somewhere else.
Rent vs Buy: Single Family Home
Finally, we get to what, for most people, is the “end goal,” and that is living in and owning a home. Of course, this is the most expensive option. For most people, it will only happen once you’ve established a good credit history, saved enough money for a down payment, and then gone to a bank or other financial institution and been approved for a mortgage. At this point, you’ll pay anywhere from 3.5% to 5% to 20% or even more of the property’s total as your down payment, and then pay back the rest to whoever holds your mortgage.
So when you’re looking at the question or rent vs buy, unless you have been extremely lucky with your business, inheritance, or have wealthy parents, few young adults will be able to go with this option straight out of the gate.