Why Renting is the Convenient Decision Home Ownership versus Renting an Apartment SunShine Tweedy COM/156 [ August 29, 2010 ] LaToya Johnson The American dream is to own your own home. For some this could be an impossible task to tackle. For others becoming a home owner is as easy as 123. Then there is the select few who prefer to rent over becoming a home owner. If you were to think of the differences between the two options, you might change your mind.
Whether you prefer to be a home owner versus a renter, or vice versa, taking a look at the other option might change your mind. Many people would believe that owning your own home is incomparable to renting; ultimately that decision could be determined by an individual’s circumstances. One of the main reasons a person would choose renting a home rather than owning a home, could completely rely on the individuals own personal need for a whole house compared to an apartment. When individuals think of homeownership, they probably think of children, and the family lifestyle.
There are grown adults starting families that were raised financially aware that home ownership is the way to go in life. “Home ownership makes financial sense for many families” [ (Fletcher, Yearns, ; Swanson, 2008. ) ] Then for some people this may not be immediately needed or they are not financially able to become a home owner. One must take into consideration all costs that are associated with being a homeowner. Looking beyond the purchase price in your home ownership decision” (Fletcher, Yearns, & Swanson, 2008. “It’s possible that all the other costs of owning a home -taxes, insurance, utilities, maintenance, and perhaps, additional transportation costs, could equal or exceed mortgage payments” (Fletcher, Yearns, & Swanson, 2008. ) Before you could even start to consider owning a home, you must make sure that you have a down payment. “The down payment is the initial amount of cash you put towards the property or home you decide to purchase” (Fletcher, Yearns, & Swanson, 2008. ) “Remember the costs that are included just to move, closing costs, and any needed emodeling or appliances”; these costs alone could be a large amount of money added to the bill. (Fletcher, Yearns, & Swanson, 2008. ) A perspective home owner is often required to become “prequalified” for a loan. (Fletcher, Yearns, & Swanson, 2008. ) Having a lender assess your income, debts, does not gaurantee loan approval, but will serve as an useful guide. The amount a perspective home owner is able to spend for a home, could be determined only be an actual loan application (Fletcher, Yearns, & Swanson, 2008. “Spending no more than about one-fourth (up to 28 percent) of family income on house payments generally will leave enough money for other needs, but lenders often will allow 33 to 36 percent of gross (before taxes) monthly income to be spent on long-term debt, including housing” [ (Fletcher, Yearns, & Swanson, 2008. ) ] Not everyone is able to become approved for a large amount. Leaving the home choices shabby, with remodeling required. Coming up with a large amount of money for a down payment, may not be possible for most people. Often there is a lifetime of saving money for the down payment costs.
This requirement is not something that a perspective home owner can just make magically appear. More so now with the position most people are in due the economy. Renting an apartment or house is the easier, cheaper and faster option. Compare the requirements that are included with home ownership to the requirements with renting an apartment or home. There is a ton to consider when you are making such a committed decision. The age of a person also becomes a factor when making the decision to rent or own. Teenagers and young adults, single individuals, usually start off in life renting an apartment.
Typically single people do not have the need for a house, and an apartment is the perfect option. No responsibilities. Renting allows people in younger age brackets to start off their responsibilities on a smaller scale. It would not be a good idea for young adults to start off with a big responsibility, and not be able to fulfill it. Things changes during this time in someone’s life, and because owning your own home is a large commitment. It just makes more sense to start off with renting. Typically when renting an apartment or house, there is much less responsibility.
Depending on whether or not the place is furnished, you could possibility not have to furnish your place. Usually though the appliances are included when renting an apartment, but typically not a house. A renter is not responsible for making any repairs to the home, or the property. Another thing that is not included when renting is the property taxes or house insurance [ (McCay ; Hawks, 2002. ) ] A renter though must have Renter’s Insurance to cover any damages that are made to the renter’s own property [ (McCay ; Hawks, 2002. ] These two things could be very costly to a home owner. Of course you are responsible for renter’s insurance, but it is usually cheaper than home owner’s insurance. When you are home owner the amount of responsibility could be overwhelming for some people. Especially if you are a first time home owner, and have been renting since you moved out of Mom and Dad’s place. So now, you must decide if renting or owning your home is the right decision for you. You cannot make a serious decision just to keep up with “The Joneses. Purchasing a home is a serious commitment, and there is a large amount of factors that will be put onto the table with a decision as big as this one. Until you are sure of what is right for you; maybe renting is the smart way to go. Just make sure that you take all factors into consideration before you make a jump. References Fletcher, C. N. , Yearns, M. H. , & Swanson, P. (2008, May). Iowa State University. Retrieved Ausust 09, 2010, from www. extension. iastate. edu. McCay, T. , & Hawks, L. (2002. , April). www. extension. usu. edu. Retrieved August 09, 2010, from Utah State University.