Food for Thought: Is Renting a Better Option for You Than Buying?
By Dima Deych, Marketing Director- Mayo Group
Here are just a few reasons that renting an apartment might be a more attractive option than buying a home:
* Location. Buying a house close to the downtown area of a large city can be much more expensive than in the suburbs. Because of space constraints, apartments are often more readily available. "Urban settings are seeing an influx of people who want to be able to live near work and the cultural attractions that you find in a big city," says John McGrail, CEO of Mayo Group, a real estate development firm specializing in urban revitalization. "Rental properties are often the best option for people who want to live close to the heart of it all, since single-family residences can be difficult to find or very expensive the closer you get to downtown."
* Freedom to relocate. It goes without saying that it takes a while to see equity accrue in a property you buy. So if you're planning to or even considering relocating in the near future, buying a home probably isn't the right option for you. Not only can you sign-a short-term lease on an apartment, some rental properties allow month-to-month leasing after a certain period of time.
* Maintenance. If you're the kind of person who doesn't enjoy fixing things up - or landscaping - perhaps renting is a better choice for you. From grounds keeping to building upkeep to repairing that leaky faucet, building managers and superintendents take care of their tenants' maintenance needs.
* Poor credit. Maybe you're in the market to buy, but your credit isn't. You need sound credit to secure a mortgage loan in the current economy. A year or two or renting and careful attention to your credit could do wonders for your credit rating and your dreams of buying a home.
* Lack of job security. It's a homeowner's worst nightmare: losing your job and not being able to make your mortgage payments. It causes endless heartache, destroys your credit, and can result in a foreclosure. The economic downturn of the last few years has caused so much instability in the job market that foreclosures are at a record high. If you think your job has a shaky future, you might want to defer buying and give yourself the flexibility of renting for a while.
* Your relationship. The last thing you want to do if you're unsure of the future of your relationship is to buy a home with someone who may or not be in the picture years, months or even weeks from now. If you're dependent on two incomes to make your mortgage payments - or if there might be bitterness regarding the settling of assets if you split, now is definitely not the time to buy!
* Space needs. How much time do you spend at home? Are you outdoorsy or do you travel frequently for business or pleasure? If you don't spend much time in your house, you might not need a large space to accommodate you. Renting an apartment could better suit your on-the-go lifestyle.
* The economy. Everyone knows that the economy isn't at its best for homebuyers right now. Questionable lending practices during the economic boom have resulted in a crackdown on loan eligibility. It's harder than ever to qualify for a mortgage loan. Renting an apartment in a recovering economy might be your best bet while you save up for a down payment and restore that sparkling credit.
The dream of home ownership has changed over the decades and it's important to look at whether it's the right dream for you to pursue right now. Renting an apartment might give you just the breathing room you need before you get in over your head in a less-than-ideal home ownership situation.
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