May 192018

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By G. Steven Bray

For many, the decision whether to rent or buy can be a confusing one. I’ve found a multitude of surveys and tools that claim to help you with the decision, but with so much information, analyzing your own situation can be overwhelming.

I came across an interesting Web site the other day that analyzes the rent vs buy data in an easy-to-digest format – a US map using shading to indicate whether buying or renting makes more sense. The map presents the results on a county-by-county basis, and you can zoom in to see the specific results for your county.

The map also allows you to choose a breakeven point – the point at which buying and renting are equally advantageous. Set this to the number of years you think you would live in the same location, and the map resets the shading to show you areas where buying or renting is better.

Finally, it’s important to consider the assumptions used to produce the map. The producers used US Census data to determine average rents and home prices. For the “buy” scenario, the producers assumed a 20% down payment, a 4.5% mortgage rate, and $2000 in closing costs. The last two could be a bit low depending on your situation, and unfortunately, many folks don’t have 20% for a down payment. Give me a call if you want me to calculate the breakeven point for your specific situation.

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