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The buy:rent ratio varies a lot from place to place. In a few markets, like New York, buying is definitely way more expensive than renting. On the opposite end
by lpolovets 15y ago
The buy:rent ratio varies a lot from place to place. In a few markets, like New York, buying is definitely way more expensive than renting. On the opposite end of the spectrum, in a place like Vegas or Miami, your rent will be significantly more than your mortgage payment.
I think a buy-to-rent ratio of about 15 (i.e. 15 years rent = purchase price) is about where buying and renting break even. If you live in a place with a lower ratio, your mortgage payment would be less than the rent on the equivalent place; if you live in a place with a higher ratio, you can get a nicer place for the same monthly amount by renting. http://explore.trulia.com/datavis/rentvsbuy/Q2-2011/ http://explore.trulia.com/datavis/rentvsbuy/Q2-2011/
- Vadoff 15y ago"On the opposite end of the spectrum, in a place like Vegas or Miami, your rent will be significantly less than your mortgage payment." I think you meant to say significantly more.
- lpolovets 15y agoFixed. Thanks!
- runako 15y agoGenerally agree with your comment, but a couple of small quibbles with the numbers. The ratios and stats typically published by those in the RE industry (the Trulia post included) only take into account the mortgage payment itself. That is, principal and interest. Those are not generally even close to the monthly payment that a homeowner sends to the bank, which must cover insurance, taxes, etc. The difference is frequently substantial. And of course, a homeowner still has the obligation of maintenance.