Does it Cost More Or Less To Own Vs Rent?

Generally speaking, when interest rates are low monthly rent payments are equal to or greater than the monthly mortgage payment to buy a comparable place. Conversely, if the interest rates are high then a comparable monthly mortgage payment will not provide a similar property in size and features.  For many the decision to rent comes from looking at housing as only a place to sleep and live vs also considering it a long term investment.    

Historically rental rates increase from year to year, vs a mortgage that can be locked in for 7, 10, 15 or 30 years.  So, long term buying will give you greater control over your housing costs like a virtual "Rent Control."   

The bottom Line, is that if you can qualify for a loan for a place that will meet your needs for the next 5-7 years or longer, and you have even a low amount of savings for down payment and closing costs, it probably makes more sense to buy vs. rent just based solely on long term costs!

Plus, typically real estate will appreciate in value. And, even if the market doesn't increase in value in a worst case scenario, there can be substantial income tax benefits to owning vs renting which means the government will allow you to take part of the dollars you would have otherwise paid in income tax to be used to pay your housing payment and home purchase.

How Long Do You See Yourself Living In The Next Place

If you're planning to move within  2-3 years, you might not want to incur the costs of buying a home realizing that the home would have to increase in value 2%-3% per year for the purchase price down the road just to cover your selling costs. However, if you intend to stick around for 3 years or longer, then buying usually makes sense.

At the same time, if you are buying a place and then leasing that same place down the road, vs just selling it in 2-3 years, then it may still make sense to buy now vs lease. If you view this as a real option, and the posibility of relocation out of the city is also a real possibilty then be sure to talk with Mitch about the best property to purchase now that can also be an ideal rental property if that need becomes a reality.

Maintaining Flexability Does Not Always Mean Renting Is The Best Option

If you think the possibility exists that a new  job or position could prompt a move to a different part of town or even a different city than renting may provide greater flexibility between short term leases, annual lease renewals and even 'job transfer' clauses that allow you to break a lease early with little or no penalty if you take a new job out of the area.   Similarly, if you are new to town or and you are not sure which part of town you want to living on long term then renting gives you the ability to 'try before you buy.

At the same time, if you are open to buying and then leasing out that property, if you decide the current location of your next place does not work for you long term, then it may still make sense to buy now vs lease. If you view this as a real option, and the posibility of relocation out of the city or to another part of the city are also real possibilities, then be sure to talk with Mitch about the best property to purchase now that can also be an ideal rental property if that need becomes a reality.