Choosing between buying a house or renting an apartment has been a tough choice for many people.
The pandemic has made long-term decisions more difficult. It affects the decisions we might make: like whether we should buy or rent a home. Both options have advantages and disadvantages that you need to weigh before you make a decision.
In this article, we cover whether you should buy or rent an apartment in 2021. We’ve also provided opinions from experts to help you make the right decision.
Buying a House
Owning their own house and lot is a dream for many people. There is something that feels more substantial when you own the place where you live. It feels satisfying to own your house and have a sense of community.
However, as much as buying a home is fulfilling, it also brings different advantages and disadvantages for a potential homeowner. This is especially relevant with the hard times brought by the pandemic.
Why Buying a House Makes Sense in 2021
Buying a house has one distinct advantage: you get to own the place. A house is a valuable asset to have over the long term. It is an appreciating asset, which means it gains value over time. It also ensures you permanently own a space.
In addition, owning your home means you can adjust your house according to how you want it. If you buy your house, you get to have complete control over your living space. If you want something removed or added, you have the choice to do it.
Why Buying Might Not be a Good Choice in 2021
Buying a home also has its disadvantages. Therefore, it would be wise to consider the following points before making a purchase.
One of the first things you should keep in mind is that buying a house is expensive. The median price of a house is in the lower to upper $300,000s.
You also have to make numerous payments before becoming a homeowner. Among the costs involved are the down payment, the closing fee, the mortgage payment, along with miscellaneous expenses such as insurance and repairs. Unfortunately, in this pandemic, people are likely to be unable to afford such high costs.
Owning a house means you are responsible for the upkeep of your home. There is no landlord to come and maintain things for you. When renting, you are responsible for taking care of your property.
There is also a risk that you may lose your house if your finances are not set. Especially with how COVID-19 has shaken up people’s finances, a homeowner may come to lose their mortgage if they are not on stable footing.
Renting an Apartment in 2021
There are many benefits to renting an apartment in 2021. Unfortunately, with the pandemic happening, everything has been affected, including rent costs. Here are some considerations that may make sense for renting out an apartment instead of buying a house.
Advantages of Renting in 2021
Buying a house costs a large sum of money compared to renting an apartment. While owning a home can cost you around upper or lower $300,000, the median rental price is between the low $1000 to high $2000 price range.
As the economy is still recovering from COVID-19, it might make better sense for some people to rent instead of buying a house. Renting is a lot cheaper and has fewer additional costs compared to buying a house.
Renting an apartment also means you are not stuck in a permanent living situation. Compared to owning a house, renting makes you more mobile—you can easily change locations depending on your needs. When renting, your landlord would also be responsible for the maintenance of your space. This provides peace of mind from home DIYs or repairs for your rented apartment.
Considerations for Renting
The most significant disadvantage of renting is that your money would not go into an asset you can own. Unlike homeownership, renting a place means your money only goes to your landlord. Rent money would not go into building equity for you.
Further, you do not have complete control over your housing because you do not own your living space. Therefore, you cannot change the layout of your rented apartment completely.
While some minor renovations may be okay, major renovations may not be alright for your landlord when you are renting.
Another disadvantage is that your landlord may stop leasing a property to you. Landlords may abruptly end your lease after your contract expires because they may want to sell the property or because they do not renew your lease at all. You should also consider the fact that your landlord may increase your rent later on.
What the Experts Think
Ron Wysocarski, Broker and CEO from Wyse Home Team Realty, says that the housing right now is quickly rising. This means that if you own a home, you will have an asset increasing in value.
While homeownership can be expensive in 2021, it may prove to be the fit for you if you are stable and want to settle down. Even if a house may be costly, it would still gain value. According to Matt Ward from the Matt Ward Group, based on projections, homes will increase in value a year from now.
However, according to real estate professionals from Modern Realty Guam, first-time buyers may heavily consider the options of renting or buying. First-time owners may not have sufficient funds ready to start the process of homeownership. It may be more prudent for people like them to rent rather than stretch their funds for homes they cannot afford.
The right choice between renting an apartment or buying a house is a difficult one to say certainly. Both have distinct advantages and disadvantages.
Renting may be cheaper, but it does not let you own your property, and it offers less control over your housing. On the other hand, while buying a house may be more expensive, it lets you own a place that can grow in value in the current 2021 market. Choosing between the two ultimately comes down to your situation, finances, and plans for the future.