On many non-partisan real estate websites, you might run across an article or two trumpeting as fact the theory that it’s cheaper to buy a home than it is to rent. This primarily came about in the winter of 2012, when it was less expensive to buy than to rent in 98 of the nation’s 100 major metropolitan areas, including traditionally high-priced cities, such as Los Angeles, New York and Boston. The two exceptions are Honolulu and San Francisco.

Blanket statements of this nature, however, are inherently flawed because we humans are like snowflakes: no two are exactly the same. In much the same way, every single person’s life is unique. We all have different incomes, financial concerns, employment situations, and so forth.

So, what are some quick and easy ways to determine if renting or buying a home is right for you? Good question; read on.

A Little Math Goes a Long Way

Changing Price of Real Estate Image

If you have a relatively decent grasp of arithmetic and are willing to put in a little time on the internet, you should have no trouble figuring out if renting or buying is right for you and your individual situation, regardless of whether you’re considering an apartment, condo or townhouse, or single-family home. One simple formula to try is to research and record the asking price for rentals in the area in which you want to live and calculate the average asking price. Repeat this process for homes for sale in the same area, and then factor in some of the other costs usually incurred by both renters and buyers, such as insurance, maintenance and taxes.

For a more immediate, albeit potentially less applicable to your personal situation, result, you have numerous real estate related rent-vs-buy calculators at your disposal for free online. Some of the comparatively more trustworthy, non-biased sites to try include Ginnie Mae, Realtor.org and the California Association of Realtors (car.org).

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This is filed under Rent Vs Buy.


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