Rent vs. Buy

Should you rent or buy a home?  With interest rates at their lowest point in sixty years and rents briskly increasing in most cities, for most people, the answer is buying a home. 

Of course, home ownership carries other costs in addition to the monthly mortgage payment—including taxes, insurance, homeowner association dues and maintenance—which may dissuade some potential home buyers. But keep in mind these extra costs allow you to build equity in your home. If you plan to stay in your home for at least five to seven years, the equity from your down payment and monthly mortgage payments is a primary way for middle class families to build net worth. 

The New York Times buy vs. rent calculator is an interesting tool.  It takes into account the costs of home ownership, even calculating the lost opportunity cost of using  funds for down payment versus investing that money.  It also calculates the lost opportunity cost of using rental payments for investment purposes.  The reality is that you need to pay to live somewhere, whether you rent or buy, so really those funds wouldn't go solely to investments. 

Whether you use an online calculator to crunch the numbers or follow the anecdotal principle that real estate success is to be made on the "buy side" (and, wow, is it a great time to buy), give me a call and we can talk about renting vs. buying in your specific situation.