Compared to owning a home, living in a rental apartment is incredibly easy. Why do the work yourself when you can enjoy the following benefits?
Dedicated property and maintenance staff to call if something goes wrong
No snow shoveling, lawn maintenance or pool/sauna care
A single monthly rent check usually pays for everything (rather than multiple separate bills and fees when you own a home or condo)
You get more for your money
Believe it or not, you can usually rent an apartment or house for much less than the cost of buying it, especially if you live in a larger city. And if you want to be downtown, renting is almost always more affordable than owning a condo (and you also get a lot more living space, since downtown apartments are typically much larger than downtown condos).
Plus, apartment tenants don’t have to put up the thousands of dollars in down payments, closing costs, and fees for things like building inspections, legal advice, land transfer taxes, and insurance.
And this doesn’t even take into account the cost of the loan: In the first five years of ownership, most mortgage payments are applied only to interest, not principal. This is money you won’t get back when you sell your home (and you’ll still have all the added hassle and cost of putting your home on the market).
That tax relief is not guaranteed
Getting a big tax break is supposed to be one of the biggest perks of owning a home, but you can’t always count on getting it. If your annual mortgage interest payment, plus any other deductions to which you are entitled, is not more than your standard tax deductions, you will receive no tax benefit from owning a home.
However, if you rent an apartment, you will always receive some sort of tax break, since a large portion of your rent is tax deductible each year.
maximum flexibility
Leasing provides a tremendous amount of flexibility. You can pack up and go immediately at the end of your lease (which can be monthly or yearly, whichever suits your lifestyle best); There’s no waiting to sell or worrying about the real estate market before you move. For many people, the freedom to live where and when they want is a great benefit that simply cannot be overlooked.
Minimum risk
For homeowners, the stakes are high if their finances collapse. When they can’t pay the mortgage, the lender has great leverage: the house and all the principal invested in it could be in jeopardy. That’s not to say there aren’t consequences if a tenant can’t pay their rent, but the financial devastation of losing your home is much greater than being evicted from their apartment.
In addition, there are several social service programs that are run by all levels of government to help people in need pay their rent so they don’t get evicted. Are the banks as lenient or understanding when it comes to paying the mortgage?
Ultimately, making the decision to rent an apartment or buy a home involves much more than simply comparing rental rates, mortgage payments, lease lengths, and tax breaks. It is a combination of all the personal circumstances that happen in your life, both now and in the years to come.