Apartment Living is Cheaper than Owning a House
* Interest rates are increasing;
* There is little, if any, appreciation potential for homes in the foreseeable future;
* New tax rates have changed the structure of deductions; and,
* The cost of landscape and maintaining the home have increased both in materials and labor.
Flexibility and Pricing
Many apartment communities offer the choice of month to month rentals or short- and long-term leases. Renters can tailor their stays to their specific needs and long-range planning goals. On the other hand, home owners, when they decide to sell, must wait for a buyer. If home sales are soft, they may be in a weak negotiating position to receive the best price for their home.
Rent increases for apartments have been minimum in the past few years. In today’s economy, home owners are at the risk of slow home appreciation or depreciation that may reduce the value of the home below the original purchase price. Faced with the prospect of the property selling below value, home owners must also pay Realtor fees and, in some instances, closing costs.
Rent Covers All Costs
Persons living in apartments enjoy the use of recreation rooms, swimming pools, spas, social activities and other amenities at no additional cost. For a home owner, a pool averages $35,000 to build plus the monthly maintenance costs (average of $60 per month).
Apartment renters are secure in the knowledge that when there is a maintenance problem, free maintenance help is only a telephone call away. In home ownership, it can take two to five days to obtain the assistance of a plumber, electrician or other repair person at the cost of $45 minimum to come to the home. Additional fees are the cost of materials used as well as the cost per hour for the repair person.
Cash Outlay
Consider the dollars involved in purchasing a condominium or a home. The major expense is in the down payment but additional costs for mortgage points, recording fees, title insurance costs, credit reporting charges, appraisal fees, professional inspection fees and insurance coverage add up.
Out-of-pocket expenses when you take possession of the home will include the cost of moving, deposits on utilities, and purchasing tools for minor home repairs and gardening. Interior decorating costs can include paint, window coverings, special wall treatments, purchasing additional furniture and installing or upgrading landscaping.
Landscaping and maintenance fees are ongoing for home owners. Gone are the days of weekly maintenance provided at apartment communities, including lawn care, shrub trimming and the planting of seasonal flowers. The cost of a gardener varies according to the size of the yard but $60 per month is an average fee.
If you choose to care for your lawn yourself, plan to spend a minimum of three hours per week on yard work and expect to contract out some of the work, such as tree trimming.
Turn Key Freedom
The bottom line is that apartment renters can afford more luxuries, such as:
* Extra budgeted dollars for vacations;
* Additional savings for investments and savings plans;
* Freedom from dependence on credit cards because of reduced living costs;
* Additional leisure hours available for more quality time to spend enjoying family outings and activities;
* Freedom to pursue sports interests;
* Time to enjoy recreational activities at the apartment community; and,
* Added reading and hobby hours.
As our lifestyles change, we have the opportunity to evaluate our priorities. Residing in an apartment community today can make dollars and sense.
