If you’re reading this article, you are probably asking yourself the question presented in the title. Fear not, this article will help you answer that question—but at the end of the day, you are the one that will have to determine if you should buy a house or rent.
Before we go too far, full disclosure from me. I am currently a supervisor of the Westview Forest Apartments in the Spring Branch submarket in Houston, TX, so you might say I’m biased in favor of apartments. But I’ve lived in plenty of apartments, and believe it or not, I’ve even lived in apartment complexes that I was supervising. And I’ve owned several homes as well, so I think it’s fair to say I’ve had most of the experiences that both renters and homeowners can have.
To begin with, there are two major considerations to take into account when thinking about the buy-house vs. rent-apt question—lifestyle preferences and money. For example, if you have to have privacy (no common walls with neighbors!), if you “gotta” have a back yard for your kids or your big dog, etc., then you want a house, and if you can afford to buy one and keep up with annual expenses, then your decision has been made. You may have to buy a fixer-upper or buy outside of town if funds are tight, but you know it’s a house you want.
On the other hand, if money is a more important factor in your thinking—either because you don’t have it or you have money but don’t want to spend it—then renting an apartment in most locations will almost always be cheaper than buying a house in that same area.
But whereas some people have a clear preference for an apartment or a house, this article is primarily directed at readers that are truly on the fence regarding their housing decision. My late brother was a good example of someone who was always thinking about buying a house, who could have afforded it and yet ended up living in an apartment in a high-rise building for 25 years. The reason for that is that he was a single guy, with just a pet cat that was very happy in his apartment. My brother had a very active social life, and at the end of the day, he figured out that he simply did not want to be bothered with the responsibilities of owning a house—looking at many houses to find one that fit your needs, negotiating a purchase, getting a loan, buying insurance, maintaining the home and yard and dealing with broken hot water heaters, sewer backups, roof replacement, etc.
In contrast, his high-rise building was in a brilliant location, relatively close to the beach, walking distance to a local art museum, with lots of bars and restaurants around, the rent was very reasonable considering the awesome location, the building had security personnel monitoring all people coming in, a pool and jacuzzi, and great neighbors.
My late brother’s preference for not having to deal with house maintenance issues was clearly demonstrated just a couple of months ago, when Houston suffered a terrible freeze and power outage. Tens of thousands of houses had broken pipes as a result of the freeze, and most of them couldn’t get a plumber to show up and fix the pipes for many days, and even weeks.
On the other hand, the staff at the apartment complex that I supervise (Westview Forest Apartments, in Spring Branch) insulated all of the pipes before the cold weather hit, minimizing the number of pipes that broke with the freeze. And because we maintain an extensive inventory of plumbing parts at Westview Forest Apartments (you kinda have to when running 350 apartments—you can’t make a trip to the hardware store every time you need to repair something), and because we have staff experienced in making these repairs, we had all pipe leaks repaired even before the freeze was over. Many single-family houses did not.
The other thing that my brother loved about his apartment building was the security guard downstairs that screened all entrants to the building, something very few people can afford to have at their own house. Given that crime is everywhere, many apartment residents really appreciate that security.
At Westview Forest Apartments, we go even one step better. We have a guardhouse that is staffed 24/7/365—plus half-a-dozen videocameras–at the single entrance to the property so we control not only entrance to the apartments themselves but we also control access to the parking lots—something that was not done at my brother’s building. While he told me that cars were occasionally stolen from the lot where he parked his car, we have never had a car stolen from our parking lot since the guardhouse was installed.
We are very proud of how we run our guardhouse, and we are unaware of a single other apartment complex (out of nearly 3000 complexes in Houston!) that operates a guardhouse like we do. But more important than our pride is how much our residents appreciate the fact that the guardhouse is staffed 24/7 and that the guardhouse attendants work really hard to screen people wanting to come into the Westview Forest Apartments. Indeed, if you Google our property and look at the reviews, you will see that many of the reviews highlight the importance of the guardhouse to our tenants and their families.
As I mentioned above, my brother’s rent was a bargain, especially considering its location and amenities. When comparing his rent to what a house would cost, he was also aware of a common mistake that some home buyers make. I remember a great tenant, Juan, we had years ago who always loved living in our apartment complex. One day I was in the office and after years of living in our apartment complex, he had decided to buy a house. He had saved up about $20,000 and he also qualified for a government program that gave him an extra $20,000 for a downpayment, so he put those $40,000 on a $200,000 house, and got a mortgage for $160,000. He told me that his mortgage payment was going to be a few dollars less than the $800 he was paying in monthly rent with us. Because he was so excited, I didn’t want to say anything, but comparing the expected monthly mortgage cost to the amount of rent you are paying is probably the biggest mistake one can make because many experts say that the mortgage accounts for only about ONE-HALF of the overall expenses of owning a house.
Juan learned that lesson the hard way. About two years after he left our apartments, I was surprised to see him back at our apartment complex. I asked him if he was visiting someone and he said that no, he was back to renting with us. I asked him what had happened, and he said that his expenses of owning the house were a lot more than just paying the mortgage. He hadn’t taken into account the fact that his utilities in a house would be much higher than his apartment utilities, and he had sticker shock when his bill for property taxes at the end of the year was just about $6,000 (equal to $500 each and every month of the year). He didn’t have to hire anyone to take care of the yard, but he did have to buy the mower, weedeater and other garden tools and equipment and he suffered an unexpected financial shock when his water heater gave up the ghost—costing him $3500 to replace. He figured the house actually ended up costing him about twice as much as his $800 rent, making it impossible for him to save any money at all. He ended up selling the house at about what he paid for it, but after paying to stage the house prior to selling it, and after paying the real estate broker’s fee and other closing costs, he actually ended up losing about $15,000.
The point of Juan’s experience isn’t to say buying a house is a bad idea, but rather, that you have to look at all the benefits and costs, and then make the right decision for you!
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