Renting an Apartment vs. Buying a Home

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Renting an Apartment or Buying A Home | Property Management, Inc.

Moving to a new town or city, finding a better area to live, or getting your first place on your own? Whatever your reason for relocation, looking for a new place to live comes with so many challenges and considerations. What kind of neighborhood will you be living in? How far will you be from shopping centers, attractions, and essentials? What does the cost of living look like? Even more importantly, when you're researching where to put down roots, you'll be considering key questions like: Is buying a house better than renting an apartment? Is renting an apartment easier? Which will save you more money or bring you better returns in the long run?

When it comes to deciding whether to rent an apartment or buy a house, the right choice really comes down to your lifestyle, your budget, your personal preferences, and your circumstances. While buying a house was once the more traditional and popular choice — as people put down their roots and began families earlier in life — most young people today choose to rent apartments when they're starting life independently and then progress to purchasing houses as they mature, move up in their careers, build savings, and have families.

The homeownership rate today is relatively low, with 64.2 percent of Americans owning their own houses in 2018. On the other hand, rental rates are high, with a national vacancy rate of only seven percent in the beginning of 2018. That means the other 93 percent of rental properties are occupied.

While these U.S. Census averages seem to indicate renting is the more widespread choice, both buying a house and renting an apartment have their advantages and disadvantages. If you're looking for help making the choice, we're here to guide you. From considering apartments vs. houses based on budget to considering some general renting vs. buying pros and cons, here's everything you need to know about buying a house vs. renting an apartment.

Costs of Buying a House

Before you dig into the fine details of lifestyle, location, space, and other living considerations, it's essential to think about your budget and break down the costs involved in both buying a house and renting an apartment to determine which might make more sense financially.

While buying and owning a house involves some steep upfront expenses, it can also provide financial returns over time, so consider whether you're interested in making a long-term investment. Here are the costs you can expect when buying a home:

Down payment costs for home ownership | Property Management, Inc.

1. Down Payment

When purchasing a home, you'll be expected to provide a percentage of the price upfront before securing the property. This is your down payment. While the amount you pay depends on the local market, your mortgage type, and your personal credit score, the cost can range from 3.5 percent of the home's value up to 20 percent or higher.

2. Earnest Money

In addition to your down payment, you're typically expected to provide an earnest money deposit with your purchasing offer to show you're serious about buying the property. Generally, you can expect to provide up to three percent of the house's value upfront depending on the market. Your deposit will go towards the purchase of your home once the sale is approved.

3. Home Appraisal

When you're taking out a mortgage to help finance your new house, a loan approval from your lender will most likely require a home appraisal to make sure the house's value matches that of the asking price. Before or during the inspection of your new home — including consideration of the interior, exterior, property size, improvements, and additional features — you'll pay a fee of about $300 to $400 for the average home.

Get a home inspection | Property Management, Inc.

4. Home Inspection

When you're deciding whether to buy a home, it's probably a good idea to hire a home inspector to spot any defects or potential problems you might not have an eye for as an inexperienced buyer. Your home inspection will likely cost about the same as a home appraisal and you'll most likely pay at the time of inspection.

5. Property Taxes

When you own a home, you're responsible for paying property taxes set by your county or city to support local schools, public services, and infrastructure costs. While tax rates are subject to change each year and vary from location to location, you will pay property taxes both upfront when purchasing and annually, or in monthly escrow payments.

6. Homeowner's Insurance

Insuring your new home is a requirement both prior to closing to ensure loan approval and every year of ownership to protect your property against accidents, weather, and other threats. While homeowner's insurance costs are variable based on your credit score, coverage limits, and policy deductible, as well as your home's location, contents, value, and style, the average annual premium is about $1,173 in 2015 and will likely continue to rise. You'll pay your first annual premium upfront with the sale of your house and continue to pay annually or in monthly escrow payments.

Home owner closing costs | Property Management, Inc.

7. Closing Costs

In addition to inspection, appraisal, and down payment costs for purchasing your home, you'll face a variety of other closing costs with the sale, including credit report fee, loan origination costs, recording taxes, lender's and owner's title insurance, and a closing fee, among others. You can expect your closing costs to range from two to five percent of the total sale.

8. Mortgage Payments

Once you've purchased your new home, you'll need to keep up with monthly payments on the principal and interest of your mortgage payment for its entire duration — usually for 15 or 30 years. Depending on whether you have a fixed-rate or adjustable-rate mortgage, your rates will either remain constant or vary, but you'll pay your mortgage fee as part of your monthly escrow.

9. Maintenance, Repairs, and Renovations

Owning a home comes with the responsibility of keeping up with and paying for regular maintenance and repairs as well as renovations to improve your house's quality, value, and appeal over the years. Addressing uninsured damage, replacing appliances and fixtures, taking care of interior and exterior paint jobs, maintaining mechanical elements, replacing carpets, and installing home improvements can be costly and vary greatly depending on the job. But good quality will increase your property value over time.

10. Utilities

Unlike renting, owning a home means you're responsible for paying all property utilities and services, including electric, gas, water, cable, internet, recycling, and garbage. The monthly or quarterly cost of each will vary by property, location, and personal usage.

11. Furnishings

When you're a first-time homebuyer, odds are good you don't have the amount or array of furniture and fixtures you need to fill your bigger space. You'll need to budget for the amount of spending necessary to purchase new furnishings and decorations to adorn your home.

12. Moving Costs

Whether you're buying a house or renting an apartment, moving costs will be a part of any moving experience. Depending on how much you need to move, how far you're relocating, what season you move in, and whether you use a professional service or rent your own truck, moving costs can range from $100 to $1,000 or more.

Costs of Renting an Apartment

While renting an apartment typically involves fewer upfront costs than buying a home, there are definitely expenses involved. Here are the typical costs of renting an apartment:

1. Security Deposit

When you sign your lease agreement to rent your new apartment, your property manager will typically require a security deposit to protect against property damage, broken leases, delinquent rent, and other expenses. Your security deposit might be up to 1.5 times the cost of your monthly rent.

2. Rent and Pet Rent

Rent varies greatly depending on property size, location, age, condition, number of occupants, and local market, but you'll be expected to pay monthly rent on a strict payment schedule. If you have pets, you might be expected to provide a pet deposit, monthly pet rent, or both, to protect against possible pet damage. In addition, unless you live in a rent-protected property, your rental rate can increase whenever you sign a new lease.

3. Renter's Insurance

Unlike homeowner's insurance, renter's insurance isn't typically required to secure a lease, but it helps to protect your possessions against theft, damages, fires, and other threats. While your insurance rates will vary based on deductibles, coverage limits, the value of your property, and other factors, the average monthly cost of renter's insurance is as low as $15.

4. Utilities

Some rental properties include certain utilities — like water, gas, electric, trash, lawn care, and snow removal — in the cost of rent, especially if you live in a large apartment complex. Other rental properties, however, may leave the responsibility of all or most of the utility costs to the tenant. What you pay depends on where you rent and how much you use.

Laundry costs | Property Management, Inc.

5. Laundry

Many rental apartment units will not include an in-house washer and dryer, so you'll either need to use your building's coin-operated machines or find a local laundromat. You can expect to spend $2 to $4 per load, so you'll have to budget and plan your visits to the laundry machines according to what you can afford each week.

Pros and Cons of Buying a House

Now that you're familiar with the overall costs involved in buying a house vs. renting an apartment, it's time to delve into the more complex pros and cons of choosing each for your lifestyle. Here are the advantages and disadvantages of buying a home.


While expensive, home ownership does provide plenty of advantages:

1. Tax Benefits

Owning a home can make you eligible for specific tax benefits, including homestead exemption — which exempts homes occupied by their owners from part of the regular property tax burden — and federal tax deductions — which allow you to itemize your federal income taxes, deduct property taxes and mortgage interest, and reduce the total burden of your income tax.

2. Investment Building Over Time

Unlike a rental property, buying a home is an investment — meaning you build equity as you pay off your loan, owning a bit more of the house until you've paid it off in full, and you also benefit from your home's value increasing over time. You can boost your value with home improvements and increase your property's overall worth, making it both easier to refinance when you need more funds and worth more in profit if you ever decide to sell.

The freedom of owning your own home | Property Management, Inc.

3. Possible Source of Income

One of the best benefits of owning a home is your freedom to do what you like with it. If you're comfortable with the idea, need more cash, and follow all local rental property laws, you can turn your home investment into a source of income by renting out rooms, floors, or even the whole house to tenants.

4. Community Roots

Because homeowners are putting time and money into their houses, they tend to stay in their homes longer, put down more roots, start families, and engage with their communities more than a temporary apartment-renter might. Owning a property will give you a sense of belonging and encourage you to get involved in other parts of your community, like associations, clubs, volunteer organizations, businesses, and more.

5. More Creative License

While property managers will impose limitations and rules regarding how you can treat, decorate, and renovate your property, owning your own house opens up so many avenues of creative and decorative possibility, from painting and hanging art on your walls to embarking on DIY renovation projects like finishing your basement, adding new fixtures and appliances, updating your rooms, and building onto your property. Your home is your canvas.


Despite the numerous benefits of owning a house, it comes with its downsides as well, including:

1. Cost of Maintenance and Repairs

In a rental apartment, you can call your property manager whenever you have an issue with plumbing, electric, broken appliances, or other defects, and your property manager will be responsible for both handling and paying for maintenance and repairs. When you own a house, the tasks and expenses are your responsibility alone.

Home owner expenses | Property Management, Inc.

2. Steep Upfront Costs

With numerous upfront fees, including your down payment, earnest money, home appraisal, and more, buying a house involves a lot of expenses both upfront and over time.

3. Potential Financial Loss

Homes can increase in value over time. While you have the chance to build equity and make profits, you also run the risk of losing money on your investment if your home decreases in value instead, depreciating your assets based on the local or national market.

4. Long-Term Financial Commitment

Homes are a significant investment. From mortgage payments and property taxes to maintenance, repairs, and renovations, you will need to continue to pour money into them over the years. When you buy a house, you're making a long-term commitment to care for it and pay for it, so make sure you're prepared mentally and financially.

5. Long-Term Lifestyle Commitment

If you have the kind of lifestyle that requires constant movement or you like to keep things temporary to make life interesting, home ownership probably isn't for you. In addition to the time, money, and maintenance you'll put into your new home, you'll also need to go through a complicated selling process if you need to move. Unless you're ready to settle down and put down long-term roots, think twice before buying a house.

6. Lack of Furnishings

Some apartments come furnished, but a new house won't. You'll need to be prepared to purchase a full set of furniture and provide every living essential for yourself.

7. No Included Utilities

As we mentioned before, owning a home means you're responsible for the price and management of every utility you need.

Pros and Cons of Renting an Apartment

Offering an easier transition and a more temporary lifestyle, apartments are the choice of many — from young beginners to retirees looking to downsize. If you're considering renting, here are the advantages and disadvantages to help you decide:


Easy to lease and often inexpensive, apartments offer a variety of benefits, including:

1. Easier Relocation

Renting an apartment means you have less space to work with and therefore fewer possessions. If you're not certain about putting down roots yet or prefer to live more minimally, apartments offer an easier relocation process and more flexibility when it comes to your lifestyle. If you need or want to pick up and move away at some point, there's no drawn-out sales process — it's as easy as waiting until your lease ends and leaving.

You don't have to pay for repairs | Property Management, Inc.

2. No Repair or Maintenance Costs

Because you won't own your apartment, you don't have to worry about scheduling repair and budgeting for fees every time a pipe bursts or an appliance stops working. Your property manager is responsible for handling the details and expenses of all maintenance and repairs, so all you have to do is make a call when you need assistance.

3. Less Strict Credit Requirements

While buying a house requires stricter, higher credit scores and comprehensive checks, renting an apartment is more lenient. As long as your credit score is decent and you don't have any bankruptcies on your record, you're likely to be approved for the lease you want.

4. Included Utilities

Although not all apartment complexes cover all utilities, some complexes and units include some utilities in the cost of your monthly rent, meaning you save money and time while homeowners pay up to hundreds of dollars for utilities each month. Included utilities also mean you won't have to worry as much about your usage.

5. Better Locations

While houses are likely located in quieter neighborhoods farther from the hub of your town or city, you're more likely to find apartment complexes in prime locations near the best shopping, attractions, nightlife, and other entertainment. Downtown locations can be especially valuable for young tenants.

6. No Concern for Real Estate Market

Homeowners have to worry about market value, economic conditions, and which way their property's value fluctuates in response. But as a renter, you don't need to concern yourself with anything but paying your rent.

7. Less Expensive Up-Front

Renting an apartment doesn't include any of the costly fees you pay for a house upfront. You just need to provide a security deposit and your first month's rent and then you're ready to move in.

8. Sometimes Included Furnishings

While it's not common and will cost more in monthly rent, some apartments come fully furnished for your convenience, sparing you the cost and effort of buying, moving, and arranging all your own furniture.


In addition to the host of benefits renting an apartment boasts, it does have some drawbacks:

1. No Federal Tax Benefits

While homeowners can claim some tax exemptions, you won't be able to as a renter because your apartment isn't technically your property.

2. No Equity-Building Over Time

Although homeowners are responsible for much steeper costs in acquiring and maintaining their houses, they can also reap the rewards of building equity and increasing their home's value over time. Renting an apartment may be easier, but it doesn't give you this opportunity to invest and benefit from appreciation.

5. Less Control Over Ongoing Costs

While your rent is set for the term of your lease, once you renew or sign a new lease, the rate is subject to change. You'll have little control over what you might pay monthly in the future. Paying your rent in a timely manner, being a good tenant, and keeping on good terms with your leasing agent will give you a better chance of avoiding large rent increases, but it's always a possibility when your lease expires.

Rent an Apartment With PMI

If you've looked at all the pros and cons of renting vs. buying and you've decided to opt for an apartment, Property Management, Inc. is the perfect place to look in Central PA. Offering beautiful rental apartments and townhomes across Harrisburg, Shippensburg, State College, Williamsport, and Mechanicsburg in a wide variety of styles — from budget-friendly to luxury — we've been dedicated to providing living options that fit your lifestyle for the past 50 years. Check out our currently available rental apartments and get a head-start on your new life today!

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