Is Renting a Cheap Apartment Better than Being Tied to a Home? | Mortgage

Is Renting a Cheap Apartment Better than Being Tied to a Home?

by BobBoog

Does renting a cheapo apartment still beat buying a home? Writer Jack Hough thinks so. He claims that nowadays renting a cheapo apartment makes more financial sense than owning a home. He may be right, but it doesn't take living in the apartment next door to OctoMom for most people to realize that saving a few dollars isn't always worth it. After all, quality of life matters too. Here are five reasons why it sometimes makes more sense for a homeowner to modify his loan than resort to a cheap apartment.

1. Comfort. Cheap rent often goes along with a poor location like peanut butter goes along with jelly. Many newer apartment buildings resemble human beehives. Yes the rent is less expensive and there may even be a banner advertising a free month's rent. But visit the place on the weekend and/or chat with some of the tenants and you might find out the real reason the manager insists upon a year's lease.

2. Privacy. Most cheap apartments offer little privacy. Whether it is the scream of a newborn baby crying in the middle of the night, or the sound of passionate lovemaking, or just the tattooed stranger glaring at you while you are doing your laundry; privacy is something that one generally foregoes in cheap apartment living.

3. Privacy. As a former rental agent I have been called to places to inspect damage caused by a tenant and/or guest. As a result I have seen my share of things that people didn?t want to have revealed. Sometimes tenants don?t call for fear that the landlord might raise the rent, or discover the three additional people camping out in the second bedroom without the Landlords knowledge or consent. Which leads to Reason #4.

4. Freedom. Along with the privilege to decorate (or not decorate) as freely as they would like, homeowners do not have to follow a strict set of rules. Compare this to an apartment dweller who will receive a six-page rental contract as well as a list of rules and regulations. These rules make it easier for eviction and/or additional charges too. A tenant and/or his guest(s), for example, can be charged for extra storage space, parking, and maintenance and be evicted for disturbing, annoying, interfering with other tenants or breaking the rules and regulations. Which leads to Reason #5.

5. Security. One of the main reasons people leave their cheap rental often has to do with a change of ownership. Simply put: a new owner often jacks up the old rent. Or she may have a new set of rules and regulations. Break a rule and a tenant can receive a 3-day notice to Pay Rent or Move Out (Quit). An apartment dweller can be moved out much more quickly than a homeowner too. An eviction for a non-paying apartment dweller, for example, takes about 30 to 90 days. Yet it takes about twice as long (180 days or more) to get rid of a nonpaying homeowner. Even so, a tenant may be allowed to make up his back payments if the landlord allows him to do so. If the landlord decides otherwise, a law officer will escort the tenant off the premises. But a lender will not deny the late payments of a homeowner which makes even a condo a more secure place than an apartment.

Some people do enjoy a quiet, secure apartment rental (guest house) with dirt-cheap rent and a landlord who does not meddle or enforce rules and regulations. However, these landlords are increasingly fewer and farther between. More likely the place with the cheapest rent tends to be a noisy, semi-dangerous, over-crowded beehive managed by an uncaring apartment manager who lays down strict rules and regulations. Certainly in these tough economic times people are forced to move into cheap apartments, but that's not what Mr. Hough is saying. He's suggesting that one should voluntarily step down to save money. But the reason that some people continue to stay and fight for their homeownership and even willingly pay more money each month is because many owners have rented cheap apartments before. They learned the hard way that sometimes the money you save is not worth the hassle. After all, there still are some things more important than money, even if it's something simple like listening to the silence that can surround you.

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

Bob Boog is a real estate broker and author of three books on real estate. His latest is called Mortgage Modifications Made Easy. For a brief time you can visit his website and download a free sample chapter.