Is it more cost-effective to buy a house or pay rent at an apartment when I first move out?

Question

I am planning on owning a house sometime in the near future anyway; but would it be more worth the money to rent an apartment when I first move out as it may be cheaper or get right on to owning a house?

Answer 1

Renting means that you NEVER see a benefit to the money you are paying ... and you do NOT own anything -- no equity, nothing.

Owing a home takes a LOT of hard work -- and I mean it. But what you are paying (which may be very close to rental prices) -- is buying you a bigger and bigger stake in the ownership of the residence with every payment you make ... HOWEVER, you also have ALL the responsibility to MAINTAIN the residence as well.

Answer 2

If you plan to stay at least 2 or 3 years in the same house it is likely to be cost effective to buy a house. For a shorter period of time I would rent a house.

Owning a house is an investment. On the long run you will make a profit owning a house. Over a shorter period of time prices can also go down.

Answer 3

If you can afford to buy a house, it's almost always better to own than to rent. And with housing prices going down in many markets, there might be some deals to be had.

Homeowners can claim interest rates and property taxes as income tax deductions. These tax deductions, in effect, reduce the cost of the monthly mortgage payment and can make a house much more affordable in the long run.

In addition, as the mortgage payments are made and as the value of the house increases, you'll build up equity (ownership) that can be valuable later on.

When you rent, you're helping someone else build equity and get a tax break.

Answer 4

Buying a house is always more cost effective than renting due to the fact that you're building equity. That being said, whether you should buy right now depends on a lot of factors such as do you have enough down pymt money AND money for insurance, repairs, etc.? If you think you are going to do it soon anyway, why bother with the time, expense, and lost rent money of renting? Go for it!

Answer 5

When owning a house...if something breaks...YOU have to fix it or pay to have it fixed.

When renting...all you have to do is call someone like a landlord to have it fixed. There are a lot of hidden costs to owning a house like property taxes, paying for water (depending on where you live). So many hidden expenses that I can't even name them all.

Yes, renting is throwing your money away but also unless you are filthy rich and paying for your house with cold hard cash...you're throwing your money at the bank and the house isn't yours until that mortgage is paid for in full.

If you're still young and single...just rent yourself an apartment and save up for a year or so until you do a little more research.

Answer 6

If your rent cost is 40% of your gross income and the mortgage payment is close to it, it's worth it to just own a home. You must live in it for at least 2 years to make it worthwhile due to the intial and closing costs. If there was a job relocation within less than 2 years, you're better off to rent.

Answer 7

Renting is throwing money down a hole.

Buying a house is an investment that will bring future returns.

Sometimes paying for a house is less expensive than renting.

Answer 8

I would say renting would be better that way you are not tied down to one place. Owning a home is a lot of responsibility you may not want right away. Renting gives you a lot of options.

Answer 9

It's more cost-effective to buy a house, but buying a house ties you to one location. When I first moved away from home I changed jobs frequently so I moved frequently. Later, when I was more settled in my career, I bought a house. Your circumstances may be different.

Answer 10

If you will be living alone, if you can afford it, an apartment would be better. But if you plan on having a family then I would say go with homeownership.