Research reveals that more and more young people, especially millennials and Gen Xers are more interested in renting property than they are in owning a home.
A whopping 74 percent of millennials were renting their places of residences. Meanwhile, another study shows that approximately 52 percent of young adults in the US are living with their parents. Experts have pointed out multiple factors why these are such popular decisions, from economic instability to personal preferences.
But is owning residential property better than just renting an apartment?
Owning a House
A few decades ago, owning your own home with a nice lawn and a picket fence was the heart of the American Dream. But times change, and because of key economic factors, finding great real estate for sale can be a hassle.
However, home ownership is still a mark of maturity. And you may be surprised by the benefits of having your own home.
- Add to your assets. Buying a home is essentially adding to your personal assets. This can help with all sorts of things such as increasing your credit score. Unlike apartments, you own a home you’ve bought in perpetuity, which means you can leave it to your next of kin or children should you wish to do so.
- You’re in control. Because you own the land and the home, you can do whatever you want so long as it meets with safety protocols. Are you a fan of Russian architecture? No problem, you can design your home in that style. Did you ever want your own barbecue pit? Just build one in your backyard!
- Get a larger space. Having your own home also lets you have the space for other things, whether that’s a family or a passion. The additional rooms and lawn area provided by a house can let you build a nursery, an art studio or a practice area for your band.
- Expensive to acquire. The cost of buying a house is prohibitively expensive, especially if you want to live in a nice neighborhood. Although you can defray the cost somewhat by taking out a mortgage, the initial down payment and subsequent fees can be too much for a young adult to handle.
- Expensive to maintain. Furthermore, owning an entire house means paying for its upkeep and maintenance. That means keeping the plumbing updated, repairing the roof, tidying the lawn and everything else. Such maintenance efforts all cost money that you may not have.
- You’re rooted in one place. Buying a house means committing to staying in one location for years, possibly decades. This means you have to be extremely discerning where you buy your property if you don’t want to get stuck in a bad location with a home you can’t sell.
Renting an Apartment
As more and more young people and professionals migrate to the cities for work, apartments grew in popularity. A single unit is more than enough space for a person living on their own and young professionals can focus on saving up for other expenses while renting one. But is apartment living as good as it’s made out to be? Here are both the upsides and downsides of renting an apartment.
- Let the landlord take care of it. One of the best things about renting an apartment unit is, if your lease is good, any and all repairs must be undertaken by the landlord. This means you won’t have to shed money out-of-pocket every time your doorknob falls off or your sink clogs.
- Apartments are meant to be transitory, especially if you’re just renting one. If you moved into an apartment to be close to your workplace, you can move out quickly if you decide to change companies. You can move to a different location entirely on a whim and you won’t be tied down.
- Marginally more affordable. Apartment rent varies wildly from location to location, but if you play your cards right you may end up spending less money than if you’d bought a house. You also won’t have to pay taxes and other fees associated with homeownership.
- Smaller spaces. Apartment buildings aim to maximize profits and that means carving up space for as many tenants as possible. The more affordable an apartment, the smaller the unit tends to be. This may mean not having enough space for a hobby or even your significant other.
- You’re not in control. Because you don’t own an apartment you’re renting, you need to doublecheck with the landlord for everything you want to do to the property. Do you want to paint the walls blue? Better check the lease if you can do that. Want to drill holes in the wall for a shelf? You need your landlord’s approval.
- It’s not forever. Unless you’re renting to buy, a rented apartment isn’t a place for you to put down your roots in. It’s there for you to stay in for a few years before you move on. You also can’t list it as a permanent asset.
So which one suits young people the most? It all depends on your situation. If you’re still getting your career started and juggling multiple financial obligations, there is nothing wrong with renting an apartment. But if you want to settle down and start a life of your own, then maybe it’s time to buy a house. Assess your personal situation first before committing to buying or renting any form of property.