Can Renting Save You Money?

When you become an adult and move out to be on your own, most people try to find an apartment. Very few twenty somethings attempt to rent a house with friends, or just jump right into a mortgage. To each their own; financial situations differ greatly between the college-set and the newly employed.

When you have the option of buying a house, it as if you have outgrown apartment living. Truthfully, choosing to find an apartment or house to call home is not always a matter of finances, as a person’s goals, lifestyle, and wanderlust come into play as well. In the U.S., approximately 35% of adults decide to rent an apartment instead of buying a house.

An apartment rental is sometimes seen as a temporary solution. If you find an apartment to live in with your significant other, it may be considered a stepping stone to buying a house together further down the line. Unless you live in one of the particularly beautiful apartment buildings, your apartment rental is probably an eyesore. Most people like to wait before buying quality furniture, and instead purchase lighter, cheaper pieces that can be thrown away or given away when they move.

In a study conducted by Harvard University on buying a house versus renting an apartment, it was found that in most cases for the majority of people it made more sense financially to rent an apartment instead. It could be because renter’s save an estimated $590 per month (averaged across the U.S.). The cost of maintenance and utilities is what adds up.

Buying instead of renting is generally regarded to be a smart investment. But only if it is a long-term investment. When homeowners decide to sell after less than five years of mortgage payments, the bank profits but the homeowner does not. Even with the fluctuating stock market, it may be a better investment then a home that will be sold shortly after closing.

If this is the case, when you do find an apartment it is important to be satisfied with the living arrangements, as it will be less temporary than you supposed. Maintenance that is taken care of by the apartment complex is a pretty great amenity appreciated by all. Some renters may consider an in-suit washer and dryer essential, while others may value a tub in the bathroom more. The amenities are what transform an apartment from “livable” to “excellent.”

Try to find an apartment that is either close to your work or easily accessible from a freeway if you commute. Even the luxury apartments can fall flat if the distance to work or recreation becomes annoying. You are more likely to view an apartment as a home and less as a temporary solution if it fits your lifestyle.