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Renting v. Buying

By
Mortgage and Lending with Louisiana Mortgage Associates

                Leading online real estate and marketing firm, Trulia, conducted a study of the advantages of renting versus buying a home in the 50 largest cities across the country, and the results proved that owning a home is actually less expensive than renting. Here are a few interesting facts from their examination.

                Trulia compared renting a two bedroom apartment, condo or townhome to owning it, and in over 72% of the major cities, it was better to buy. A few cities that are exceptions to this rule are major metropolitan areas such as New York, San Francisco and Los Angeles, but that can be expected in those areas. Only 12% of America’s largest cities are markets where renting is actually more affordable than buying a home.

                However, the results prove that in other major cities, such as Detroit and Miami, it is still better to buy and Las Vegas is considered the best city to buy a home in the United States. As a Mortgage broker, I have also compared prices of renting versus buying in Lake Charles, Sulphur and the surrounding areas in Southwest Louisiana and my numbers have been consistent with the findings of Trulia. Another factor to take into consideration is the real estate market isn’t considered at its best right now; therefore, it is much more affordable to become a home owner in 74% of major U.S. cities.

                Frank Garay and Brian Stevens from Think Big Work Small furthered the study by conducting one in Seattle, and they found that a 3 bedroom, 2 bathroom house built after the year 2000 was two-hundred dollars cheaper to own than to rent. Having said that, the facts are in, and for most of you home ownership seems like the better deal. I would encourage you to do some research on your own to see if home ownership is the best financial decision for you! 

Comments (8)

Steve and Jan Bachman
RE/MAX Gateway, Reston, Herndon, Ashburn, Sterling, Fairfax - Herndon, VA
Realtors - Northern Virginia

Good one Keith. We usually ask our prospective buyer clients 3 questions. Do they like our area? Do they like their job and feel that they are secure there for 5 years? and...is the home they can afford to buy one that they can live happily in for 5 years.

If the answer is no to any of these questions we advise caution and maybe continuing in a rental situation. Even though our market bottomed in 2009, you cannot live in a home just 2 years and expect to make money or break even on a sale should you be transferred or laid off. 5 years seems like a reasonably safe number.

Dec 06, 2011 08:19 AM
Steve and Jan Bachman
RE/MAX Gateway, Reston, Herndon, Ashburn, Sterling, Fairfax - Herndon, VA
Realtors - Northern Virginia

I just finished responding to my 85th comment :-) Never again.

Dec 06, 2011 10:15 AM
Marilyn Boudreaux
Marilyn Boudreaux, Century 21 Bono Realty - Lake Charles, LA
Lake Charles LA Century 21 Realtor

With low rates available several buyers have been able to purchase homes and have a housenote equal to or lower than rent they were paying so why not buy and invest in a home!

Dec 06, 2011 04:59 PM
Patricia Kennedy
RLAH@Properties - Washington, DC
Home in the Capital

Keith, this is great advice.  In some large Metro areas, like here in DC, it will probably be different from on suburb to the next, and downtown neighborhoods as well.

Dec 07, 2011 03:02 PM
Keith Wimberly
Louisiana Mortgage Associates - Lake Charles, LA

Steve-You are right; 5 years is a reasonable number and we also ask our customers the same question. Hopefully, you want have to respond to too many more comments until after the new year! 

 

Marilyn-I'm with you! 

 

Patricia-Thank you! Yes it does vary more in larger metroplitan areas like DC. Lake Charles and surrounding areas is only about 185,000 total in population, so it is much smaller than DC! 

Dec 08, 2011 07:09 AM
Roy Kelley
Retired - Gaithersburg, MD

In Montgomery County, Maryland, we recommend home purchases rather than renting for those in good financinal condition and expect to be in the area for the long term. Even though real estate is selling with an average 60-70 days on the market, we recommend renting for military personnel that will be in the area for two years or less.

Enjoy the holidays!  Sorry you have no wineries in your area.  You need to visit Virginia, Maryland and Pennsylvania to try the regional wines!

Colonial Williamsburg Holiday Wreath IMG_1243

Photograph by Roy Kelley using a Canon PowerShot G11 camera.

Roy and Dolores Kelley Photographs

 

Dec 12, 2011 03:18 AM
Keith Wimberly
Louisiana Mortgage Associates - Lake Charles, LA

Roy- I would love to visit any of those areas. Hopefully I can get a trip in the works within the near future. Thank you for the wreath picture and have a Happy New Year! 

Dec 12, 2011 05:45 AM
Dave Sullivan
Real Estate One - Birmingham, MI
Michigan Realtor with an investor viewpoint

I did a quick interview with Brian Stevens and Frank Gureay on video bloging you can view it here  

Aug 19, 2012 10:48 PM