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The differences between buying and renting an apartment

Are you on the fence about whether to buy a property or not? You may be considering renting an apartment but are unsure if it is the right decision? Well, anyway, read the pros and cons of both situations below to make a better decision:

Advantages of owning an apartment:

  • Possible income: Thanks to home sharing apps like Airbnb, you can rent out any extra rooms in your apartment and earn some side income. You can also use it to pay part of your mortgage payments.
  • Valuation over time : Unlike a rental apartment, your own property increases in value over time, depending on the district. You can increase the value further with home improvements and eventually sell it off for much more than what you paid.
  • Security: You get a sense of security that you have a roof over your head, and it will stay on it even if you are having a hard time financially (unless you have any outstanding mortgage payments).
  • Freedom to make changes: Your own apartment gives you the freedom to make improvements, paint the walls, take down walls and renovate the space to your liking. This type of freedom usually does not come with rented apartments.
  • Home Equity Loan: Depending on how much housing capital you have (if you have taken out a mortgage), you can take out a loan at a certain percentage of your equity to use how you want.

Disadvantages of owning an apartment:

  • Costs: You will pay a substantial amount each month, including mortgage payments, maintenance costs and repairs.
  • Long-term commitment : Buying an apartment with a mortgage means that you commit to paying a substantial amount of money every month for a very long time.
  • Potential loss: Although this does not happen often, sometimes the value of a property decreases with time instead of increasing. If this happens to you, you could potentially lose thousands of dollars.

Advantages of renting an apartment:

  • Easy to move: Unlike your own apartment, you are not stuck in the same area if you do not like it. You can quickly move to another area whenever you want – you do not have to sell the property and buy one again.
  • No real costs: Sure you will pay the rent every month, but you will not. pay many other costs such as mortgage payments, maintenance and repair costs, pest control, pool cleaning, property taxes and so on.
  • No investment required: You do not need hundreds of thousands of dollars to get your head around when renting apartments. A few thousand dollars in advance gives you your new, ready-to-move-in home immediately.
  • Not Bounded with Mortgage : If you pay off a mortgage every month but then lose your job, you may not be able to make full payments, leading to fines and penalties. This is not the case with a rental apartment; you can only move to a smaller apartment with a lower rent until you get back on your feet.
  • Lenient Credit Requirements: Renting an apartment does not come with strict background checks and credit history revisions. A decent credit rating can give you almost any apartment you want.

Disadvantages of renting an apartment:

  • Rent increase: Over time, the rent for a property increases, which is not the case with fixed mortgage payments when buying a home.
  • No share building: [19659004] Although you pay monthly rent, you get no equity in the apartment as you do with a mortgage.

Finish it:

Buying a property is more meaningful in the long run, but only if you have a stable income and can afford to make a down payment. Otherwise, it is much more convenient to rent an apartment.

If you decide to choose the rental route, you must obtain a rental insurance to protect yourself and your belongings in case something goes wrong. At Paradiso Insurance we have an affordable rental insurance .

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