Why You Should Buy a Boston Home NowSeptember 22, 2012
With mortgage rates way down and rents on the rise, buyers should seriously consider buying a Boston home instead of simply renting. Analyzing the current numbers, it’s a better investment to purchase property than support a local landlord.
Luxury Real Estate Sellers Benefit from Influx of Buyers
There so many buyers in the current market taking advantage of the low mortgage rates. Sellers should seriously consider getting their properties ready for sale if you have any intention of selling in the near future.
Trulia’s explains why buyers are encouraged to purchase real estate:
- First, we looked at all the homes for sale and rentals listed on Trulia in June, July and August 2012. On for-sale homes, we took the asking price and estimated what it would rent for; for rentals, we took the asking rent and estimated what it would sell for. That way, we can calculate the average rent and asking price for an identical set of properties in a metro area, for a direct apples-to-apples comparison. By looking at homes currently for sale or rent, we're able to illustrate the actual housing options that consumers face right now.
- Second, we estimated the total costs of renting and buying for the typical property in a metro over a seven-year period. We factored in all the costs of homeownership (e.g., closing costs, maintenance, insurance, taxes, etc.), along with the tax benefit of deducting mortgage interest and property taxes, as well as the proceeds from selling the home after seven years with modest home price appreciation. On the rental side, we factored in renters’ insurance and the security deposit.
- Finally, we calculate the net-present-value of all those costs to capture the opportunity cost of tying your money up in a down payment. This gives us the total cost of buying versus renting. We then calculated the dollar difference and percentage difference between renting and buying.
Take a look at your area on Trulia’s infographic.
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