The long held belief that home ownership is a reliable investment option is fading fast as a mobile population of young professionals who have the means to buy a home choose to rent instead. The American dream of acquiring a large, comfortable home with a 30 year mortgage is changing. In many cases continuing to rent serves long term financial goals more efficiently than signing up for a mortgage, property taxes, ongoing maintenance costs, and homeowners insurance premiums.
People who know they are facing a move in the next five years typically do not want to endure the hassle of home ownership. The closing costs and selling cost involved alone tip the scales in favor of renting. This detailed infographic and rent calculator from the New York Times shows that buying a home may pay off after five years, but certainly presents a set of liabilities inside a shorter time frame. One interesting perspective brought to light by this exhaustive list of considerations is the lost opportunity costs. When deciding whether to rent a home or purchase one, it is important to consider how much money can be made from investing the down payment in a solid mutual fund while renting a home, instead of putting it into a mortgage that may or may not someday turn into equity in a home.
When making a decision about whether to rent or buy a home, consider the cost of renovation as well. Many homeowners underestimate how much they will spend on essential renovations, which can not only affect how much money is spent on a home, but also the homeowner’s quality of life. Living in a space that is under construction can be stressful, and can negatively affect other aspects of life.
Many apartment communities in major cities offer amenities that they typical homeowner does not have the means to add to their own living space. Living in a Wood Partners development offers many advantages that may be out of reach for a homeowner. Green living is easy in a Wood Partners community.
For more information on the advantages of renting an apartment home with Wood Partners, please contact us.