September 25, 2011
College students prefer to rent an apartment as opposed to the costs of being a home-
owner because spending more on housing necessarily involves a trade-off. The more
students spend on any one thing, the less they have to meet other needs or achieve
financial goal. While owning a home is a good investment, college students prefer to rent
rent apartments because they avoid property taxes, may invest in stocks, and maintain
According to Mclean, (2011) most jurisdiction pays for community services, such as
Roads, schools, fire departments, and police protection by levying a tax on real estate
property. Property taxes are calculated by multiplying a property tax rate, often called
the MIL rate, by assessed value of property in thousands. For example, a property assess-
ed at $90,000 would pay the tax rate time 90, whereas a property assessed at $150,000
would pay the tax rate times 150. The more expensive the house the more you pay.
The debate over whether to rent or buy has become a permanent fixture of the real
Estate world (National Review, 2009). “Real estate has been seen as a very good place to
put your money during past decades, but I think sentiment is starting to change, “says
Benjamin Tal (2008), an economists at CIBC World Markets. In fact, some renters
believe that, over the long run, they can do more to grow their net worth if they avoid
homeownership and put their money into stocks. But wait, aren’t stock markets dead?
Not really. Over the last two decades, the TSX composite index and its predecessor
Generated an average annual return of around six percent, after adjusting inflation
(CIBC World Markets, 2008).
The website, Moving Today, has provided information about the key benefit of rent-
ing an apartment for the college student-flexibility (2009). This flexibility helps if you
are in a career that might require you to change location, as if often true for people just
starting out. Even if you have to move before your lease is up, you will probably lose
less money than you would trying to quickly sell a house. As many homeowners will
tell you, getting a house in shape to sell can be difficult and painful. When you are
finished renting, you just have to make sure the place is clean and the keys are turned in
and your obligations are finished. While renting an apartment may help a student save
money, flexibility helps them to gain financial independence as a college student.
The decision about whether to rent or buy housing depends on your preferences, your
budget, and your creditworthiness. Rent is usually less expensive than the monthly costs
for a comparably sized purchased house. Tenants do not usually pay property taxes or
homeowner’s insurance, and they avoid expenses for maintenance and repairs. Usually,
renters do not have to provide appliances, such as refrigerator, and the landlord may pay
some or all utilities. These differences can add up to savings that you can apply to your
financial plan. Renters of apartments usually have no responsibility for maintenance of
lawns and gardens, clearing of snow, or exterior cleaning and painting. However, if you
rent a home, your lease is likely to include some of these responsibilities. As a renter,
you also have less liability for injuries that occur on the property.
Homeowners are required to carry homeowners insurance on their property which