There’s no getting around the fact that real estate is a huge expense. Purchasing a property is a huge investment and for some people, home ownership isn’t the right way to go. Indeed, a quarter of renters in a survey identified themselves as renters by choice, meaning that they chose (and prefer) to live in an apartment instead of purchasing a home. The definition of apartments has also changed — many people think of apartments as one of many in a multi-unit building. However, some apartments are single-family homes that have been divided up or are part of a luxury building that offers plenty of space and amenities. Let’s talk about why you should consider renting, what some of the benefits of renting are, and what basics you’ll need to have ready when looking at apartments.
Who’s Renting?
Census ACS data from 2014 reports that almost 37% of households were renting and Harvard’s Joint Center for Housing Studies estimates there will be over four million new renters in the next ten years. Currently over 40 million housing units are occupied by renters.
The majority of those who seem to be renting are under the age of 30, which, when you think about it, makes sense. Renting is generally more affordable than buying a house and during your late teens and twenties, you tend to be more in flux. The average American moves about 12 times over the course of their life and much of it is when they’re younger, as they attend college or graduate programs, change jobs, or move in with a significant other.
Urban centers also tend to have more renters in a small area, as it’s the most practical option in terms of space, though there are plenty of rural areas that have their fair share of renters too.
What are Some of the Benefits of Renting?
Flexibility
Having a mortgage tends to settle you in a spot for awhile. Many young people aren’t quite ready to make that kind of financial commitment, especially as they decide what they want to do with their lives. If they choose to rent, however, they have a one-year commitment (though some landlords will also allow a month-by-month rental agreement) and many can sublet their apartment or room, should they need to leave earlier. That kind of flexibility is much harder to come by when you put money down on a house.
Budgeting
In a survey, over half of the respondents who rented said that they thought renting was a better choice if one wanted to live within a budget with reduced stress. Renting is a much smaller financial commitment than making monthly payments on a home — and you don’t have to worry about property taxes, school taxes, and other costs that come with owning a home. In many rental properties, you also may not be responsible for paying utilities or heating costs as well.
Fewer Responsibilities
When you rent, if something needs to get fixed or you need an exterminator, it’s usually your landlord who comes over and handles the problem. Many landlords also take care of snow removal and keeping the grounds tidy.
What Do You Need to Have Ready When Looking at Apartments?
Apartments can move fast, especially if you’re looking in a city. You want to have all your ducks in a row before you start looking, so that if you fall in love with an apartment, you’re ready to pull the trigger, so to speak.
Different states might have different requirements, but you’ll definitely need a letter of employment, your three most recent pay stubs and bank statements, your most recent W-2 form, copies of your federal tax return, photo ID (usually a drivers license), a copy of your credit report, and money for application and credit check fees. You also want to be sure you have at least four months’ rent saved away — you may have to pay a brokers’ fee (usually the cost of first month’s rent), first month’s rent, last month’s rent, and a security deposit.
If you’re looking for short term housing options, renting is certainly the way to go!