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The realities of global economics have led to increased levels of migration. People are moving far away from their homes in order to secure a job, obtain better educational opportunities, or escape from poverty and misery of their own countries. In the US, it is common for young people from small and rural communities to migrate into larger cities with a purpose of improving their standards of living.
Thus, the issue of acquiring a living space is something that each of us would have to experience at least once in a lifetime. At the same time, many people do not realize the economic, social, and psychological factors behind the decision to rent an apartment versus buying one. This ignorance can lead to poor decisions and a waste of money and time. Although renting an apartment may provide a quick and easy short-term solution to the housing problem, it is not as economically, socially, and psychologically feasible as long-term accommodation.
Economic Feasibility of Buying Versus Renting
Purchasing an apartment, a house, or a condominium is an expensive venture. The average price for housing varies from one state to another, but the national average price for the US stands at 60,000 dollars. In order to make a purchase, it is often required to pay from 20% to 50% of the total cost of the apartment up front, and many owners would flat out refuse to sell a house without being paid the full sum in cash. Renting an apartment is much cheaper at first, as it does not require the renter to pay more than a monthly sum in advance. The average price of renting an apartment for the US is at 1,000 dollars a month.
However, one must always account for long-term costs of the housing venture in the event of having to stay in a particular location for longer than a year. Nowadays, housing loans at an average yearly rate of 3.5%-4.5% are available to the majority of the population. With a loan, it would be possible to purchase a house and pay the loan for the next 5-10 years, while having to pay roughly 70,000 dollars in total as a result. At the same time, living in an apartment with a monthly rate of 1,000 dollars, a person would pay around 36,000 dollars in three years, which is roughly a half to the price of an apartment, had he or she chosen to purchase it. Thus, renting an apartment is not an economically efficient long-term solution.
As a short-term solution, however, renting offers significant economic advantages. It takes less time to find and move into a rented apartment, which would save the effort and money that could be spent on studying or finding a job. Finding a good house in the right part of the city takes substantially greater amounts of time. A family coming for a vacation for a month would not need to buy a house, thus making the renting option a preferred one. To summarize, renting is better as a short-term solution for its availability and ease of use, but purchasing a home is better as a long-term solution.
The society has several preconceptions towards rented apartments and owned houses that can affect the user in a positive or a negative way. Communities and neighborhoods perceive new homeowners as a part of them, whereas they treat home renters with a dose of suspicion, as nothing ties them to the place. Likewise, apartment renters are less likely to participate in the life of the community, viewing their stay as only temporary.
In addition, potential employers may consider the presence or absence of permanent housing as a factor. A person with a home in private property is seen as a responsible long-term worker, whereas individuals who rent a place could pick up and leave the company whenever they want. Lastly, having a home is a symbol of status, which is respected in the society. People who rent apartments are usually perceived as poor. While these perceptions are erroneous stereotypes, they cannot be ignored.
This section is a mix of personal observations together with factual evidence. Renting a house is inherently more unstable when compared to owning one. An apartment renter lives in constant fear of being kicked out. The owner might decide they no longer want to rent the apartment. Alternatively, the money would not be paid on time. This creates a level of perpetual stress and uncertainty, that has a negative effect on a person. Being a homeowner provides you with a solid foundation against these issues.
However, not being tied to a particular location is often associated with freedom. Home renters can pursue their dreams and careers, never staying at one place for too long. While houses create a sense of belonging to a community, this factor may have negative consequences if said community is impoverished, as there are few opportunities to work, learn, and grow. Lastly, the monthly expenses and lowered standards of living associated with rented apartments do not provide a healthy psychological environment for raising children and starting a family. Homeowners, for the most part, do not have such issues.
Renting an apartment is useful when a person is pressured to find accommodations quickly. However, due to the social, economic, and psychological factors associated with renting, it is not a very good solution for long-term accommodation. Students and migrating employees may find renting a useful option. Purchasing an accommodation is better for a person who seeks to settle down and start a family. Understanding the difference and making smart choices would benefit individuals and the society as a whole.