There’s no experience quite like living in a Boston luxury condo. If you’ve ever lived life at the top and enjoyed stunning views of the Boston Harbor or city skyline and had access to dozens of amenities that make life easier, you likely never want to go back. If this is your first time considering a Boston luxury apartment, life is about to get much sweeter! While the decision to live in a luxury dwelling may already be made, what may not be decided is whether to buy or rent one. Should you make the commitment and buy a condo outright, or should you rent and keep your options open?
Which is More Economical?
In some cases, it may be cheaper to rent a Boston luxury condo than it would be to buy one. To calculate if it would be more expensive to buy outright than it would be to rent, you’ll want to look at the price-to-rent ratio. Take a sale listing of a condo similar to what you want and compare it to other similar condos that are for rent. Be sure you’re comparing apples to apples and you’re looking at about the same square footage, number of beds and baths, and amenities.
- Add the monthly cost of the rental condos and divide by the number of condos you chose.
- Then, multiply that number by 12 to get the average cost of renting a luxury Boston condo per year.
- Divide the total cost of the condo for sale by the average cost of renting, or the number you get above.
For example, if the average price of rent is $3,500 a month for a condo you like, the yearly cost is $42,000. Say it costs $800,000 to buy the luxury condo you like outright. Divide $800,000 by $42,000, or whatever your specific numbers may be. In this case, the price-to-rent ratio is a little over 19.
A good breakdown of price-to-rent ratio is 1-15 is usually better to buy, 16-20 is a little risky to buy and renting could be more beneficial, and anything over 20 is definitely better to rent. In the case above, the price-to-rent ratio is very nearly in the category of being better to rent.
Does Renting or Buying a Boston Luxury Condo Fit Your Lifestyle?
Despite what the price-to-rent ratio is, you should also consider whether purchasing a Boston luxury condo or renting one fits your lifestyle best. If you have ample savings and don’t mind to be responsible for emergency repairs and other costs associated with owning a home, it may be better for you personally to buy. However, if you prefer to let someone else handle repairs, maintenance, and other issues, you may want to seriously consider renting. If your price-to-rent ratio is high and renting is a better economical choice, plus you don’t have to worry about maintenance yourself, you could be getting quite the deal!
What Are Your Future Plans?
It’s always a good idea to think about the future when deciding to make a commitment to a new place to live. If your job is unstable or you may be interested in relocating soon, buying is unlikely to be the right option for you even if it does seem like the better deal financially. If you need the freedom to know you can change your career or have a family, renting a Boston luxury apartment gives you that flexibility.
Need help finding a Boston luxury apartment for rent that fits your exact needs? Let us help. Search our real-time luxury Boston apartment listings and start looking for your new home today.
Also check out our other Rent vs. Buy breakdowns: