To Buy or Not to Buy; That Is the Question

To Buy or Not to Buy; That Is the Question

Deciding on a place to live isn’t always easy. Although the traditional American Dream has typically included buying a house with a yard and a white picket fence, world economies don’t always consider traditional dreams. People need to weigh their options when deciding whether to rent an apartment or buy a house. There are many things to consider, and both options have their pros and cons.

Probably the biggest advantage to renting is flexibility. Although you’ll need to sign a lease agreement, this can be for a short term—sometimes less than a year—which is handy if you think you may be relocating soon. Remember to read the fine print on that contract! It will probably include rules about keeping pets and how much advance notice you need to give the landlord before you move out. You’ll need to put down a security deposit, which is usually equivalent to one month’s rent. Sometimes utilities are included in the rent, but you may need to pay those separately. Very often the utility companies will charge a hookup fee. Of course, you’re on your own if you want cable TV and high-speed Internet connections.

A big consideration for renters is parking. You’re usually out of luck if you choose a big apartment building in a city. However, some apartment complexes in the suburbs provide parking areas. Be careful: this could be a hidden extra. The biggest advantage to renting is that if anything goes wrong, you’re off the hook—it’s the landlord’s responsibility to fix it!

Buying a house is always a tempting choice. The upside is that instead of paying money to a landlord each month, you pay off the mortgage and own your own home. Of course, the downside is that you’ll need a big chunk of change for a down payment. In addition, you’ll need to pay closing costs and realtor fees, as well as buying homeowners insurance. Is renting starting to look better and better to you? Most towns have rules about what you may do with your lot. For example, you’ll need to get a permit to put up a fence, and there are rules about how high the fence can be, and where on the property line it must go.

And let’s not forget what American Founding Father Benjamin Franklin said: “In this world nothing is certain but death and taxes.” Ah yes, another good reason to rent: no property taxes! Although towns provide convenient services like trash collection and recreation, they get the money for these services from a homeowner’s property taxes.

ALAN: Hey, Lia, what did you think about the apartment you looked at this morning?

LIA: Oh, boy. I was pretty disappointed.

ALAN: Really? I’m surprised. I thought you’d love the neighborhood.

LIA: Yeah, that was the upside. The neighborhood is away from the city, so the yard was beautiful. But here’s the downside: there wasn’t a subway anywhere near the place! It would take forever to get to work.

ALAN: Could you take a bus?

LIA: It wasn’t on the bus route that goes to my office. And besides, there weren’t any appliances. The building had a laundry room in the basement, but I really wanted one in the apartment. And I couldn’t believe it didn’t even have a microwave! How would I zap my popcorn every night?

ALAN: You could always rent appliances or even buy them secondhand.

LIA: I guess so. But anyway, it had only one bedroom. We have three kids, so that’s just not enough space. There were just too many downsides for me to rent that place.

ALAN: What’s that old proverb? “If at first you don’t succeed, try, try again.” I guess you’ll just have to keep looking to find your dream apartment.