5 Reasons Why You Should Get a House Before an Apartment

At some point, everyone has to make a decision when it’s time to move out of your friend’s or family’s home to get your own place. Assuming you are qualified for both, you would be better off in the long term owning a house first instead of renting an apartment. Although owning an actual house or property for yourself would almost always be the best case, we will go more in-depth on why owning a house is better than owning an apartment.

1. Houses Can Be Paid Off

No matter what you are comparing an apartment too, if you can eventually own it, the ownership option will be better. The worst thing about renting an apartment is, you can never pay it in full. If you live in an apartment for 100 years, you will still need to continue paying to live there every month. However, with a house or property you get a loan on, it will be yours and payments stop once you repay the loan amount.

When an Apartment Would Be Good

Now that you see ownership is much better than renting in the longterm. On the other hand, an apartment may be a good solution for the short term. For example, if you may want to move to another state or your income is not stable, you may want the apartment for some flexibility. Depending on the apartment complex’s policy, you may be able to do a six month, three month or even a month to month lease to help you have a fast exit strategy.

Funds Lost Example

Using the short term example above, let’s say you did stay in an apartment for six months at $1,000.00 per month. That would be $6,000.00 used to help pay down your mortgage on a home. However, since this is an apartment, that $6,000.00 you spent will never be returned to you. The money was consumed just like any other bill when it could have been invested.

2. You Can Sell Your House

Next, one of the greatest things about owning a house is you can pay it off in full. With a typical loan period being about 25 years, instead of not owning anything after being in an apartment, when you pay off that loan and all the money you put into the property can potentially be recouped when sold. Although it is not 100% guaranteed, you can always sell your home at any time you see the value has increased to more than what you paid for it.

Example Apartment Living for 50 Years

If you live in an apartment for 50 years at 1,000.00 per month that would be 600,000.00! That 600k you would never get back plus, you would have to keep paying rent next month. However, by staying in one house for 50 years, you’d likely be done paying for it at the 25-year mark plus, you’d have enough month left over to purchase a second home. Not to mention, you can sell both properties and get all your money back and more with proper timing in your local real estate market.

3. Your House Can Appreciate

Previously we spoke about the market price of your house. Unlike owning an apartment, your property value can go up or down. Appreciation would be known as your property value going up which is what you want and depreciation would be your property value going down. How would you feel after finally paying off a house for $250,000.00 then today, it’s worth 500,000.00? That would be appreciation.

Potential Depreciation Solution

Although depreciation is a con of owning a home, if this is a problem for you, you can always sell your home after it has gained some appreciation. Using the same example above, if you bought your property for 250k, instead of waiting and hoping to double your home value, you can just sell it at 300 or 350k to take the 100k profit. Although a market crash can not be foreseen by everyone, you can mitigate your risk by taking your profit when you have it. On the other hand, if you have your dream home, you won’t need to worry, because you will love it regardless of the value.

4. You Create All the Rules

Another big pro for getting the house is, you get to set all the rules. When you are in an apartment, you have to abide by their policies. For example, it is common for apartments to have policies stating who can live in your unit. There may be a rule where, if a person is not on your lease, they may not stay in your unit for longer than a week, otherwise, you may be penalized.

Beware of HOA’s

This goes without saying, when you have your own home, you can almost do anything you like as long as you don’t live in a Home Owners Association (HOA). An HOA is typically a community of homes that have certain rules like when your trash can will be brought in, how your front lawn will be treated and how your home can be used. Although HOA’s add some restrictions to your property’s use, this does not compare as strongly to an apartment’s policy.

5. You Can Customize a House

Lastly, the reason why you should get a house first is because you can have more control of your customizations. Let’s say you want to change the floor tiles or upgrade your bathroom. In a house, you have the power to make it into your dream home by custimizing any major or minor changes allowed by your city. On the other hand, with an apartment, you are still limited to their policy and you won’t be able to make any big changes to your unit. The structure of the home is what you get and you can only dress it up with pieces of furniture. 

Bonus Tip:

6. Get a Multi-Family Home

It has been difficult to advise someone to get a home without specifying the type. There are single-family, multifamily, condos, townhomes and manufactured homes out there. Although all of these are still better than apartments for the reasons listed above, multi-family homes would be the best recommendation for any first time home buyer. This is because multi-family homes cost nearly the same price as single-family homes except it is an apartment-style. However, instead of paying an apartment complex every month money, you now pay down your loan with assistance!

Why Multi-Family Homes are Good

If you get a fourplex, a house with four units like an apartment, you can live in one and rent out the other three units. This means you can potentially live for free with income from the other three units instead of paying your mortgage all by yourself for 25 years. So which will it be? An apartment that you pay for the rest of your life or a multi-family home that you may never have to pay out of pocket?

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