July 03, 2019
Where Renting is Cheaper Than Owning
The question of whether to buy or to rent is a perennial one among certain age-groups: particularly among younger people approaching or at the age when conventional wisdom would recommend getting a starter home, but who do not have enough money for a down payment (or who don’t plan to stay in one place for long), and among seniors looking to downsize, and for whom it makes sense to consider monthly cost of living rather than aiming at building wealth.
In most cases, it is true that a monthly mortgage payment will be lower than the monthly cost of renting, which is what contributes to the (sometimes overbroad) advice that purchasing is naturally the better way to go.
According to a recent LendingTree report that compared cost of renting against cost of purchasing in the 50 largest metro areas in America, this is unfortunately not always the case. Due to a whole host of factors, there are some cities in America where it is actually cheaper to rent than to buy—particularly if you want to live in the smallest and largest homes in the area (generally medium-sized homes are going to be a better purchase value than rental value no matter where you are). This actually means it makes sense to go the rental route if buying would constitute a significant hardship or if it would deplete accrued wealth too swiftly. And among the top ten cities where this is true is one of our service areas.
The three cities where median rents are the cheapest as compared to purchase prices are:
- Louisville, KY, where median rent cost is around $329 cheaper per month than median mortgage costs.
- Milwaukee, WI, where the difference is $301;
- Oklahoma City, OK, where it is at median $300 per month cheaper to rent than to buy.
Our service area of Providence, RI comes in at number 7 on this list, because the median rental is $226 less expensive than the median monthly mortgage.
The inverse is true in our service areas of Miami (where renting costs a median of $262 more than buying) and Orlando, FL (where that amount comes to $227), as well as in Virginia Beach, VA (where that amount is $155). These three cities are those where the monthly median rental cost is highest when compared to the median monthly mortgage.
Whether you’re shopping for a home in Miami or Orlando, Florida; or in the area around Providence, Rhode Island and Warwick, Massachusetts, contact us to see how we can help ensure proper transfer of title and provide title insurance. Topouzis & Associates, P.C., is backed by multiple underwriters, staffed by residential real estate specialists and ready to help you avoid costly delays and streamline your residential transactions.