The Homeownership Myth: Renting Vs Buying a Home

Published November 4, 2019

Many people think that owning a home is a big part of living the “American Dream,” but is it really all it’s cracked up to be? Americans tend to idealize homeownership, which is fueled by the many professions that are connected to owning a home (real estate agents, insurance brokers, contractors, banks, etc.).  Most people choose to buy a home based on the assumption that they are going to be building equity. They don’t realize that their “hold time” must exceed five years in most cases to build meaningful equity.  Additionally, when you own a home, there are many things that you don’t think of, and sometimes it can lead to a big headache. Renting allows for much more flexibility than owning a home and you also have access to many more amenities than you would if you owned a home.

Stress-Free Living

When something breaks in your house or condo, you need to fix it or hire someone else to take care of the repairs. You will also need to purchase appliances and/or mechanicals when they break which could result in thousands of dollars. With apartment complexes, maintenance staff will be there day or night if there is ever an issue.  As a renter, you don’t have to deal with contractors or spend any money outside of your monthly rent.  Also, Aspen Square Management’s onsite teams are diligent about the upkeep of our apartments. They ensure the quality of your home is maintained and provide preventative maintenance.

Peace of Mind

Renting allows you to be flexible and gives you the ability to move regularly with little or no penalty. Selling a house could take months or even years in today’s market. You lose a lot of flexibility when you purchase a home. If you decide to get a new job, you are restricted to finding a job within a certain distance of your home.  If you must move for a new job opportunity and own your home, you will need to sell your house. Not only could it take a long time, but you could end up losing money in the end. Historically, the price appreciation of a house is about 1% faster than inflation, according to Jonathan Clements, editor of HumbleDollar.com and author of “How to Think About Money.” So there’s really no guarantee you will get a good return on your investment. When you rent, you have the luxury of ending your lease early, renting a truck, and moving out of your apartment with nothing to tie you down. There are also many expenses that come with home ownership that you may not think of – maybe a tree falls and now you have to pay someone to remove it, or you have a plumbing issue and have to hire a plumber to come fix it – when you choose to rent, all of your expenses are known which can allow you to budget your money more efficiently.

Amenities

Most homes and condos don’t offer as many amenities as apartment complexes such as a pool, fitness center, playground, tennis courts, basketball courts, special events for residents, referral bonuses for referring friends and family and concierge services to fax, copy and pick up packages. 24-hour maintenance is another great perk to living in an Aspen Square apartment community. Rest assured that your issue will be fixed any time of day with our on-call maintenance teams. When you choose to live at an Aspen Square community, you can enjoy resort-style living all year round.

Apartment resort-style pool

Great Neighbors

Good apartment communities put residents through a screening process to ensure everyone meets the same criteria. When you buy a house or condo, you have no idea who you’ll be living next to until you move in. When you live in an apartment, you also can meet and mingle with your neighbors at resident events, making it a great community to live within.

Apartment community paint night

Extra Costs

When renting, you will spend money on something which you will never gain ownership of.  However, when you own a home, you also spend significant money on items such as fees and taxes that never go towards your home ownership. For example, you’ll pay property taxes, mortgage interest, title insurance, mortgage-application fees, homeowner’s association dues, condominium fees, and any number of other fees associated to the area your home is in – none of which is ever applied to the ownership of your home. Not to mention other necessary expenses such as landscaping, pest control, snow removal, insurance, and utilities.

Average cost of renting/owning a home chart

Cost of Purchasing a Home

You might be wondering why it doesn’t make sense to own a home if you are planning to move within 5 years.  When you are purchasing a home, there are a lot of up-front costs that add up very quickly.  The standard brokerage fee is 5-6% based on the area, not to mention the financing costs for taking out a mortgage.  Additionally, based on how interest is amortized over the term of a mortgage, you are paying a much high proportion of interest during the months right after taking out the mortgage than later in the term.  Therefore, if you only own a home for less than five years, you run the risk of these expenses and costs surpassing the price appreciation.

How to find apartments?

Whether you are looking for student housing in Amherst, MA or luxury apartments in Las Vegas, the best place to search is the internet. Look online at places like Apartments.com, Craigslist, AspenSquare.com, and do research before picking out what apartment to live at!

 |
November 8, 2019

If you live in our apartments in Michigan, than you may be familiar with the German culture just at our fingertips.

 |
October 29, 2019

It’s no secret that Aspen Square’s apartment communities are pet friendly, and Country Manor Apartments in Agawam are no exception! In addition to the on-site off leash dog park at the community, Agawam/Feeding Hills has plenty of great dog friendly places to visit.