College Students Benefit from Renting an Apartment

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College Students Benefit From Renting an Apartment

Letra Fields

Com/156

September 25, 2011

Ali Gavenda

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

flexible qualities.

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

makes it...
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