Can I Rent an Apartment If I Own a House?

Renting an apartment while owning a house is entirely feasible and occurs for various personal and professional reasons. This dual housing setup offers flexibility and addresses specific living requirements.

Reasons for Renting an Apartment While Owning a Home

People often choose to rent an apartment while owning a house for several practical reasons. A common scenario involves a temporary job relocation, where an individual might rent an apartment in a new city before deciding on a permanent move or while commuting periodically. This allows them to explore a new area without immediately committing to purchasing another home, offering a trial period for the new environment. Similarly, some individuals seek a different lifestyle, perhaps desiring urban living amenities and reduced maintenance responsibilities while retaining their suburban or rural home.

Another frequent motivation is the need for temporary housing during a home renovation project, especially if the primary residence becomes uninhabitable for a period due to extensive work. Selling a house can also prompt this decision, as renting an apartment provides a flexible living situation after a sale but before a new home purchase is finalized. This allows for a smoother transition and avoids rushed decisions on a new property. Individuals might also rent an apartment to be closer to family or a specific school district temporarily.

Financial Aspects of Dual Housing

Maintaining both a rented apartment and an owned house involves several financial considerations. For the owned house, ongoing expenses include the monthly mortgage payment, which averages around $2,209. Property taxes are an additional significant cost, with the average annual tax on a single-family home in the U.S. rising to $4,172. Home insurance is also necessary, protecting against damage and liability, with average annual premiums ranging from approximately $2,500 to $2,800. Beyond these, homeowners must budget for maintenance and repairs, which can amount to 1% to 4% of the home’s value annually.

Simultaneously, the rented apartment incurs its own set of costs. Monthly rent is the most substantial expense, with the national average for a one-bedroom apartment ranging from around $1,600 to $1,750. Utilities, such as electricity, water, and gas, add to the monthly outlay, averaging around $150 to $250 for basic services. Renter’s insurance, while less expensive than homeowner’s insurance, is also a common requirement, costing approximately $15 to $25 per month.

If the owned house is rented out, the rental income generated can help offset a portion of these combined expenses. This income is subject to federal and state income taxes. Property owners may be able to deduct certain expenses related to the rental activity, such as mortgage interest, property taxes, insurance premiums, and maintenance costs. The Internal Revenue Service provides detailed guidance on these matters in Publication 527, Residential Rental Property.

Managing Two Residences

Managing two separate residences demands careful organization and attention to logistics. For the owned house, regular oversight is necessary to ensure its upkeep and security. This may involve arranging for routine maintenance, such as landscaping or snow removal, or coordinating with tenants if the property is leased. Establishing reliable systems for property checks, either personally or through a third party, can prevent potential issues, preserving the property’s value.

Handling mail and correspondence for both addresses requires a clear strategy to avoid missed communications. Forwarding services through the postal service can be set up for the owned house, or arrangements can be made with trusted neighbors or property managers to collect mail. Updating billing addresses, bank statements, and subscriptions to reflect the primary residence accurately ensures timely receipt of important documents. Overseeing two households necessitates efficient scheduling and communication to ensure both properties are well-maintained and administrative tasks are handled promptly.