Renting or Owning a Condo: A Guide

A condominium is a great option for a home if you want to live in the city where you’re in the middle of everything. Once you’re set on staying in a condo, you need to decide whether you’ll buy or rent one. But which option is more cost-effective or a better investment?

Investing in properties for sale is a huge step, so it’s best to give it some careful thought before you seal the deal. In this guide, we’ll help you figure out which condo venture will suit your financial goals and lifestyle.

Is Owning a Condo Right for You?

Before buying a condo, you need to consider a couple of upfront payments like deposit, closing costs, bank fees, and title costs. Your budget can also highly influence your decision, so owning a condo is a more advisable move if you’re in the position of getting a loan to cover these costs. Here are some advantages of owning a condo:

• Income generation opportunities

When you own a condo, you have an asset that appreciates every year, and its market value even grows faster than single-family houses. Over five years, condo market values can rise by 38.4%, while single-family houses only appreciate by 27.9%. So, if you decide to sell your condo in the future, you can make more than what you initially invested.

By owning a condo, you also have the option to make passive income by renting it out to someone else. Many condo owners buy units and use them as rental investments. With this, you earn their rental fees every month.

Owning a condo is perfect for you if you want to see returns on your investment. You can even save on costs when buying a pre-constructed condo for sale because these units can have lower prices than resale ones.

• Tax breaks

Buying a condo allows you to build home equity. Each time you pay your mortgage, you lessen your debt. The money you bring out goes to your property instead of your landlord’s pockets when you rent. Mortgage payments can also build your credit. Condo owners have tax breaks to which renters don’t have access.

When owning a condo for personal use, you can deduct your mortgage interest. If you rent out your condo, you can subtract insurance costs, property taxes, and utilities from your federal tax.

Is Renting a Condo Better Than Buying One?

Renting is best for you if you want to enjoy the luxuries of living in a condo but are strapped for cash. By renting, the initial upfront costs are just a few months of rent in advance and probably a security deposit. You don’t have to apply for a loan and go through a thorough process. Here are other benefits you can enjoy from renting:

• Flexible housing arrangement

A perk of renting is that it isn’t for long-term commitments. If your work setup or lifestyle is fickle when it comes to location, renting is the route you should take.

You can choose a unit that fits your needs today, and after a year or two, you have the freedom to live elsewhere. It’s best for condo hunters that belong to a younger generation as they are more likely to switch cities and take on new job opportunities. When you own a condo with this lifestyle, you have to undergo the hassles of selling the unit, which is a lot more work than ending a lease contract.

• Free of maintenance worries

As a tenant, you don’t need to worry about maintenance and repair costs because these all fall under the landlord’s responsibilities. They are the ones that should report them to management when you notice a leak or other property issues.

Win Both Ways

While there are surely pros and cons to owning and renting a condo, there’s no room for regret, no matter which one you choose. Living in a condo holds luxury and convenience you shouldn’t miss out on. Owning and renting have respective advantages that overshadow their drawbacks. To lessen the chances of you getting burdened with your decision, you should be emotionally and financially ready when picking a venture to fit your lifestyle, investments plans, financial circumstances, and responsibility preference.