Rent vs Buy

Rent vs. Buy: Which Is Best in an Affordable City?

Rent vs. Buy

City living is exciting. It’s also expensive.

Not necessarily.

Not every urban area will overwhelm your wallet whether you’re paying rent or a mortgage. You can find hot cities both desirable and affordable if you look close enough.

But before you start hunting for landlords or lenders in your dream downtown, consider these factors in the “rent vs. buy” debate.

Resell Value

If homes in an area are more affordable than you expected, you might be tempted to jump in and buy. However, there’s no guarantee the property will increase in value.

Before you leap, it may make sense to keep a pulse on the lifeline of both the city and the neighborhood. A few things to look for include the following:

  • Are new restaurants and retail outlets opening up?
  • Is the high school graduation rate rising or falling?
  • Are businesses coming to or running from the city?

It might not be apparent at first, but even the most sought-after cities can have property in declining neighborhoods.

If you’re feeling adventurous, you could rent in an up-and-coming neighborhood and really get the lay of the land. If it looks to be on the upswing, you may want to buy.

If not, you can keep renting while looking for other neighborhoods with more potential.

Compare Costs: Rent vs. Buy

Even in an affordable city, it can take years for buying to become the cheaper option.

For example, according to realtor.com®’s Rent vs. Buy calculator, if you buy a house in Oklahoma City for $190,000 with a 4.34%, 30-year fixed rate mortgage, it would take about seven years before buying became cheaper than the average rental payment of $923 a month.

Figure out how long you are willing to stay in the area, and use the Rent vs. Buy calculator to figure the most cost-sensible option for your situation.

Additional Costs of Living

Don’t let inexpensive homes or low rent be the only determining factor.

Cities in flood-prone or hazardous-weather areas may require expensive insurance.

Then there also are auto insurance, income tax, and property taxes to factor into the actual cost of living.

What’s Available? 

The availability of homes for sale can affect whether the “rent vs. buy” dilemma.

If you’re looking for a home, and the only available places to buy are apartments and condos, it makes more sense to rent.

Some hot spots—like San Jose and Houston—may be booming with apartments, but finding a great house may require a bit more patience.

To bide your time while you house hunt, consider finding a short-term or month-to-month rental. Keep costs down by renting in a spot just outside the city or in a slightly-less desirable location while you look.

Future Plans

Where will you be three, five, or ten years from now? Are you willing to stay put long enough to build equity and see if the city’s home values will continue to rise?

Real estate prices rise gradually. If you aren’t willing to stick it out, it’s a better bet to rent.

Even if you relocated for a job, double check the job market. Cities without a healthy sector related to your career may be better suited for renting, since you may have to relocate should you lose your job or want to switch employers.

Feel the Flow

Some cities may feel like more of a vacation spot than a home.

If you’re new to the area, it may make sense to rent for six months or more while you settle in. Then you will be able to evaluate the city and the neighborhoods without the excitement of living in a new area affecting your judgment.

Retrieved From:  http://www.realtor.com/advice/rent-vs-buy-which-best-affordable-city/
Hero Home Source:  For Military, Police, Fire Fighter and Teacher rebate incentives contact Mike Deehr Exit Realty
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About madeehr1213

Burlington County Real Estate Sales and Solutions – Michael “Mike” Deehr, REALTOR® Associate, USAF Retired EXIT Realty is the areas fastest growing real estate firms. My team and I specialize in helping buyers and sellers invest in real estate property and homes in Southern New Jersey area including Medford Township, Medford Lakes, Evesham Township, Marlton, Southampton, Vincentown, Tabernacle, Lumberton, Eastampton, Westampton, Shamong, Mount Laurel, Hainesport, and the surrounding areas. (609) 714-EXIT (3948) Office (609) 284-3693 Direct
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