With home prices climbing and rental prices doing the same, is it better to buy or rent?
The answer used to be a lot more clear.
Before the pandemic, that decision came down to whether you could pull together a down payment, according to Zillow.
Mortgage payments were hundreds of dollars cheaper than rents back then.
But now, the two are much closer. Some experts say potential homebuyers could find deals, depending on the location.
“You can get some amazing deals in D.C. right now if you’re looking in the suburbs, and parts of Virginia and Maryland and even on the other side of Prince George’s County,” said Harrison Beacher, the president of the DC Association of Realtors.
For Beacher, the decision between renting and owning boils down to time.
“If you can be in a position of ownership — ownership, not necessarily occupancy, but ownership — for a five year horizon, right? That means it probably makes sense for you to invest in ownership of some kind,” Beacher said. “But if you’re less than that five right now, and you want the freedom of your own capital to be able to go somewhere, explore, whatever else, then that’s probably where it makes sense to look at renting over buying.”
According to Zillow, it takes a renter four more years to save for a down payment now than it did before the pandemic.
“I do personally believe that your primary home is not an asset, it’s a liability,” said Alex Martinez, a realtor with “The Agency.” “Because that’s money, it’s stuck between the walls, and you have to look at it differently.”
Martinez recently sat down with News4 Consumer Reporter Susan Hogan for her new show Susan Makes Sense.
He believes first-time home buyers should consider buying something they can one day rent out to other people to generate cashflow.
“When you’re buying your first home, it should not be an emotional purchase, right? It should not be something where, like, I’m thinking this is my ultimate goal, this is my house. It should be looked at from a different lens. It should look at from the lenses of, ‘Am I buying the right investment property where I am going to be able to build something off of this property that can get me to the place where I wanna be eventually?'”
Whether you decide to own or rent, there are pros to each option.
Buying gives people the chance to build equity, use the property as an opportunity for rental income. Mortgage payments also stay relatively steady.
Renting has its upside too. Renters have more freedom to move with little to no maintenance costs. Upfront costs are lower, too.
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