The Expensive Side of Owning (written for Phoenix Apartment)
Renting an apartment will not gain you anything financially, but on the other hand it may protect you from financial loss. Whether we care to admit it or not, buying a home is not a "sure thing" financially. Yes, it can be made low risk, but there will occasionally be some level of risk due to the unknowns. Faulty wiring, crashing stock markets, termites, dead trees, leaking gas lines, and other similar hidden issues can jump out and bite the homeowner at any time. Even with insurance to cover all of these events, they may leave the homeowner short or struggling to make repairs at all. In an apartment, if any of those events occur it may or may not affect you at all. At worst, you pack your bags and move on.
Some of the common arguments for home-ownership include tax benefits, home equity, and pride of ownership. While these may all be well and good, they are not guaranteed, as any homeowner during the recent financial crisis will tell you. Worse yet, if home prices plummet while you still owe quite a bit on your mortgage, you can end up "upside down", owing more money for your house than it is worth. It may take years before the housing market will improve to the position it fell from.
As for tax breaks, yes, they do exist. Many homeowners can subtract mortgage interest, taxes, and mortgage insurance they paid from their taxable income, but this is only for certain wage earners below a specific income level. Individuals or families that get above that limit see their deductions go away quickly. Additionally, the Federal Government is the only tax agency that offers this benefit. States may or may not honor the federal deductions, and even if they do, financial pressures may cause governments to reconsider offering these tax breaks down the road.
