Considering record-low mortgage rates and tax deductions, homeownership is cheaper than renting over a seven-year time horizon in the 100 largest U.S. cities, according to Trulia’s summer 2012 update on renting versus buying. If you’re looking for your first home, check out b1homes to see how you can play a role in the design process from start to finish. However, a lot more people have started to rent their properties out to people, as a form of second income. If you are thinking of renting your home, or even selling your home then you might want to check out a company like these property management companies jacksonville fl to give you an idea of what you could expect. It’s easier than you think as they take care of everything for you and deal with the renter directly, they even organise an end of lease cleaning service so if your tenant leaves your house will be professionally cleaned ready for your next tenant without you even having to lift a finger.
Nationally, owning a home is 45 percent cheaper than renting.
However, exact affordability is heavily dependent on location and other factors.
Buying a home is 24 percent cheaper than renting in Honolulu, 28 percent cheaper in San Francisco, and 31 percent cheaper in New York, but is 70 percent cheaper in Detroit, Trulia said.
Trulia looked at homes for sale and for rent on Trulia.com between June 1, 2012 and August 31, 2012. It compared the average cost of renting and owning for all homes on the market in a specific metro area, factoring in such items as transaction costs, taxes and opportunity costs.
Homeownership affordability is highest in Detroit, while lowest in Honolulu and San Francisco.
In Trulia’s study, cost of homeownership assumes that the home is sold after seven years and includes closing costs, maintenance, insurance, property taxes and other costs. Cost of renting includes security deposit and renters insurance.
Mortgage rates and time horizons are key in arriving at affordability.
In the New York metro area, for example, a 4.5 percent mortgage rate, combined with not itemizing one’s tax deductions and staying in a home for five years, will make homeownership 3 percent more expensive than renting.
Meanwhile, homeownership remains 40 percent cheaper than renting in Atlanta, even with the higher mortgage rate, not itemizing and shorter time horizon.
“For prospective homeowners who are unable to secure the best mortgage rates, fail to itemize their tax deductions or plan to stay in their next home fewer than seven years, the cost of homeownership relative to renting will be greater,” Trulia reports.
View Trulia’s full list of the rent vs. buy cost considerations for the 100 largest metros.