The choice between renting or buying a home is one of the biggest financial choices you will make. With interest rates near forty year lows, the decision to rent versus buy becomes very difficult.
Zillow CEO Spencer Rascoff has one tip. “The best piece of advice for a home buyer, when thinking about whether to buy or rent, is to evaluate how long they’re going to live in the home,” Rascoff told CNN’s Cristina Alesci at the Milken Global Conference in Los Angeles.
The bottom line is if you plan on living in a home longer than that threshold, you may be better off buying than renting. In addition to estimated timeframe, one must also consider factors such as how fast a home appreciates in value. This can change drastically depending on the area.
Let’s do the math for zip code 47401. In Bloomington, IN the average price for renting a 3 bedroom, 2 bath home is over $1700 a month. With a lesser budget of $1500 a month, one could buy a $172,000 home. This would save you a total of $6,750 over renting within a 6 year period. That’s an average savings of $1125 per year!
Compare the cost of renting and buying by using the Rent or Buy Calculator. Click on the below image or click here to access the Rent or Buy Calculator to see which makes sense for you. Still have questions? I’m happy to give you my professional opinion. Please use the “Contact Me” form to your right to send me a message.