Is it Better to Rent or Buy?

Buying a place is probably one of the single biggest decisions I’ll ever make. And it’s So. Damn. Complicated. Is buying as “good” of an idea now as it was in 2006 or 2011? Is property in my area overvalued? What’s the inventory available now say about the future market? Can HOA fees really push you over the edge? When’s the next property tax hike (inevitably) coming?

It’s hard to tell if the costs of owning—realtor (and lawyer and inspector) fees, mortgage interest, property tax, repairs, etc.—outweigh the financial benefits. Luckily, the New York Times has created a nifty little tool to help shed some light on the gray areas.

Screen Shot 2014-05-29 at 5.18.55 PM

You fill in the details like home price, how long you plan to live there, closing costs, growth rate, homeowner’s insurance, etc. It even takes into account renting costs, like security deposit and renter’s insurance.

Then you arrive at Your Number: If you can rent a similar home for less than X, then renting is better.

Screen Shot 2014-05-29 at 5.15.50 PMTurns out for me, it’s definitely a better idea to keep renting. But given that the number one reason why I want to buy is not for financial benefit but to have a new place to decorate… I think it’s pretty clear I’m not ready : )

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One thought on “Is it Better to Rent or Buy?

  1. As a buyer you don’t have Realtor fees. Those are paid by the seller. Attorney fees are nearly a mute point as the Realtor and title company cover the details. If you need a write off and want to put down roots it’s a great time. Interest rates are still reasonable. HOA fees are a choice as you decide what type of property you want. Good luck and don’t burry up your head in the sand. The sky is NOT falling. 🙂

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