If you live in a bigger city or aren’t quite ready to buy a home, there are two major options. You can either buy a condo or rent an apartment. You may be wondering, “What’s the difference?”
In truth, there are several important differences between buying a condo and renting. For example, a condo is like an apartment complex except each individual unit is owned by the resident. Whereas, an apartment complex is primarily made up of renters.
The question is, which option is more prudent? Keep reading for everything you need to know about the advantages of buying a condo vs renting.
As with any investment, there is comfort in knowing that you own that item. Whether it’s a car or a condo, it’s nice to know you’re not just using somebody else’s possession on loan. But condo ownership offers a lot more than just peace of mind.
Fixed Loan Payments
When you buy a condo, you must get approved for a loan or mortgage. Most loans have fixed rates over a 15 to 30 year period. There are adjustable-rate mortgages in which your interest rate can fluctuate, but you don’t have to choose that option.
Renting, however, offers no such security. Your rent can go up with the economy or on the whim of your landlord. Depending on your contract, there may or may not be anything you can do about it.
Forced Saving and Equity
Another essential pro of buying a condo vs renting an apartment is that you can build equity in your investment. In most cases, as time goes on and homeowners make improvements and updates on their homes, the value increases.
When you go to sell your condo, you’ll make the money back that you paid into your mortgage (and probably more). It’s not uncommon for homeowners to get tens of thousands of dollars more for their homes when they go to sell.
When you rent, however, you’ll never see that money again. You’re paying for a place to live, but not investing it in your future.
Some of the most important benefits of buying a condo vs renting can be found during tax season. You can find extra tax deductions for things like property tax, mortgage interest, and more. Furthermore, if you make home improvements that increase your condo’s economic efficiency, you can find even more tax credits.
Freedom to Do What You Want
If you choose to buy a condo vs renting an apartment, you also grant yourself the freedom to do what you want with your home. While some restrictions may still apply based on the rules of the home owner’s association, you’ll have much more freedom than if you chose to rent.
When you rent an apartment, you have to pay for any damages, such as holes in the wall from nails and screws. You also will be limited to how much you’re allowed to do to customize the place. You likely won’t be able to paint walls, change the flooring, or do anything else to make the apartment more unique.
Access to Amenities and Common Areas
One of the best advantages of buying a condo vs renting an apartment is that you gain access to all kinds of amenities and common areas, depending on your condominium and home owner’s association. Condos often include tennis courts, pools, hot tubs, saunas, basketball courts, and fitness centers.
You will hardly find access to so many conveniences when renting an apartment.
Home Owner’s Association
Finally, though you may not like the fees, a home owner’s association is there for the benefit of all condo owners in the complex. HOA fees also cover the costs of maintaining the common areas and amenities listed above. Depending on the HOA, they may also take care of things like snow shoveling and plowing, yard care, and more.
If you’re planning on buying, we recommend looking up condo reports to see exactly what’s entailed with the condo you’re considering.
Now, let’s be fair and talk about why one might choose to rent an apartment rather than buy a condominium. Depending on your lifestyle, there may be ample benefits in choosing to rent, rather than tying yourself down to a home.
No Mortgage Approval
If you’re wondering, “Should I rent or buy a condo?” the answer may depend on your credit score. Typically, you need a credit score of 620 or better to get approved for a home loan. However, there are ways around that, such as finding a co-signer.
If you can’t get approved for a mortgage or choose not to, renting is going to be a better option until you can boost your credit score or are ready to make a larger commitment.
When looking at buying a condo vs renting an apartment, you need to think about longevity. How long do you want to reside in this home? Do you even want to be in this city?
Renting certainly has its advantages in terms of flexibility. You won’t be tied down to a single location. When your rental agreement is up, you can simply move on.
Don’t Need to Sell
People who own condos can move just like anyone else. However, the process is much more complicated.
If you decide to move as a renter, you won’t have to go through the arduous process of selling your old place before moving on with your life. And condos are notoriously more difficult to sell than traditional houses. Though this often depends on your location.
If you have to sell your condo, you need to hire a realtor, prep your condo for the market, allow people to tour your home, and more. This can be incredibly taxing, especially if you’re still living there during the selling process.
Maintenance Covered by Landlord or Staff
Finally, buying a condo vs renting an apartment can be decided based on your willingness to work on your home. If you buy a condo, you become responsible for things like home maintenance and repairs. Whereas, if you’re renting an apartment, those things are typically covered by the apartment complex staff or landlord.
If you’re renting and something in your house stops working, all you need to do is contact the maintenance number or landlord. By the time you get home from work, the problem will be gone and you won’t have had to spend a dime.
Buying a Condo vs. Renting – Which is Right for You?
Is renting or buying a condo better? Have you decided yet?
We know this is a difficult decision, as there are plenty of pros and cons of buying a condo vs renting. Ultimately, you need to take a look at your lifestyle and assess the needs of your family to make the best choice. Good luck, and if you’re looking for any more advice on homeownership, be sure to check out some of our other articles before you go. Our website was designed to help people like you find their perfect home.