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 shoveling snow, lawn maintenance, or pool / sauna care
A single monthly rent check usually pays for everything (instead of 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 in the center of the city, renting is almost always more affordable than owning a condo (and you also get a lot more space to live in, since apartments in the center are usually much larger than condos in the city. center).
Plus, apartment renters don’t have to pay 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 borrowing: In the first five years of ownership, most mortgage payments apply to interest only, not principal. This is money that you will not receive when you sell your home (and you will still have all the hassle and added costs of putting your home on the market).
That tax exemption is not guaranteed
Getting a great tax exemption is supposed to be one of the biggest perks of owning a home, but you can’t always rely on getting this exemption. 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 not receive any tax benefits for owning a home.
However, if you rent an apartment, you will always receive some form of tax relief, as a large part of your rent is tax deductible every year.
The rental offers enormous flexibility. You can pack up and go immediately at the end of your lease (which can be monthly or yearly, whichever works best for your lifestyle); No waiting to sell or worrying about the real estate market before moving in. For many people, the freedom to live where and when you want it is a great benefit that simply cannot be overlooked.
For homeowners, the stakes are high if their finances collapse. When they can’t pay the mortgage, the lender has great leverage – the home and all the equity invested in it could be in jeopardy. That is not to say that there are no consequences if a tenant cannot pay the rent, but the financial devastation that comes with losing your home is far greater than being evicted from your apartment.
In addition, there are various social service programs run by all levels of government to help people in need pay their rent so that they are not evicted. Are banks so lenient or supportive when it comes time to pay the mortgage?
Ultimately, making the decision to rent an apartment or buy a home involves much more than comparing rental rates, mortgage payments, length of leases, and tax breaks. It is a combination of all the personal circumstances that happen in your life, both now and several years from now.