Buying vs Renting

Buying Versus Renting: The Reasons to Rent
Melynie Keedra Holmes
COM/156
January 23, 2011
Bernard Bydalek

The advantages of renting an apartment outweigh the disadvantages. The advantages of renting an apartment are many. Renting an apartment is less expensive than owning a home. Even though there is the possibility of a rent increase there is less outlay. Breaking down the costs on a month-to-month basis, demonstrates that buying a home is more expensive. In addition to homeowners’ insurance, the mortgage payment, and property taxes; homeowners have to pay all costs to maintain and repair the home; whereas a person renting an apartment does not have to worry about those responsibilities. Even though homeowners do receive a tax deduction for owning the home this amount is seldom fully recouped.   An article in The Engineering Economist did a case study comparing the financial costs of renting versus buying (Franke, 1990). The article compared two couples with the same financial standing and made a mathematical model of the two decisions. From a financial standpoint renting is a superior option to buying.
Making the decision to rent or buy largely depends on personal preference. In an interview with homeowner of 15 years Patricia McGhee, she stated that she bought a home for the space and the freedom of not having people living above or below her.   Also Ms. McGhee thinks that apartment living was too crowded.   Karen Moss, a long time apartment renter, believes that owning a home is too much responsibility and too confining. Mrs. Moss stated, “I really enjoy getting to know people in my building and I like the security of know that any problems will be fixed by management at no cost to me.”   When asked if she would ever consider buying a house or a condo Mrs. Moss said, “No, I do not want to have to worry about additional payments for utilities and taxes. As a renter I do not pay utilities and I do not have to worry about property taxes. That feels like... [continues]

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