SHOULD I BUY OR SHOULD I RENT?
That is the question, and the answer may differ greatly depending on where you live. Hindsight being 20/20, renting obviously would have made a lot of sense over the past decade in markets that would virtually plummet in value when the housing bubble burst. On the other hand some markets, such as Portland, Oregon, San Francisco and Seattle seem virtually unscathed and many of us perhaps wish that we had invested in property in these areas.
So with the looming deadline to take advantage of the tax credit, the New York Times took data from Moody'sEconomy.Com, as well as from several other sources, and compared the cost of buying and renting a home in different venues throughout the U.S.
They use something called the "Rent Ratio," which is the purchase price of a property divided by yearly cost of renting a similar property. Under this system a ratio above 20 indicates that renting is probably the best way to go at this time. If you are at a ratio below 20, buying begins to make more sense.
if you are curious as to what are Cleveland and Pittsburgh's rent ratios, see below (copied and pasted from one of the interactive charts in the article)
One way to figure out whether to buy or rent is to look at the rent ratio: the purchase price of a typical house divided by the annual rent of a similar house. A number above 20 means you should consider renting. A number well below 20 makes a better case for buying.
|
Cleveland |
12.6 |
14.9 |
-2.4 |
|
Oklahoma City |
16.7 |
14.8 |
+2.0 |
|
Pittsburgh |
11.7 |
11.6 |
+0.1 |
For more on whether buying or renting makes sense to you here is the link to the New York Times article:
FIND A HOME: http://markostrovsky.com
Comments(0)