Boston’s housing market is made up of so many young professionals who are highly educated, financially sophisticated, and fiscally responsible. And everyone knows that buying is always the better bet. Right? Tax breaks and endless home value appreciation mean that the first thing you must do when you get that great job or that long-awaited promotion is buy a home. Right?
Well, not so fast. When you crunch the numbers you may find that renting is a better option, especially in a town like Boston with so many amazing rental options. And when you add in the incentives, amenities, and proximity of many Boston apartments, you may find that renting a great home will make you happier overall.
There are pros and cons on both sides of the question, but for Boston in particular, rent vs. buy can present a conundrum. According to recent figures, Massachusetts ranks 44th in the nation in homeownership rates, and 48th in affordability. That means purchasing a home is a difficult, if not impossible, goal for many people in the area.
And with home prices still on the rise, it is becoming increasingly difficult to buy in Boston. According to the latest figures from Zillow, Boston home values have gone up 11.2% in the last year, and are predicted to rise another 4%-plus over the next year. The median price of a Boston home is now just shy of $700,000. For even the most fiscally conservative potential home buyer, that has to feel like either a bubble or an insurmountable obstacle.
Add to this the tendency of younger professionals to move at various points in their career in order to take advantage of opportunities for professional growth and development. That means that even if you buy a home today, you could find yourself losing money on that home unless you are committed to staying in it for the long haul. And even with that type of commitment, homeowners may find themselves the victim of a market correction that could drain a significant portion of that hard-earned home equity.
So how do you decide whether to rent or buy, especially in a competitive market like Boston? Ask yourself the following questions:
What kind of down payment do you have? If you’ve got plenty of money for a hefty down payment, that may allow you to quickly infuse equity into a property. A large down payment will give you a cushion for the ups and downs of the housing market, ensuring that you don’t lose all of your home’s value in a market correction.
Do you plan to move? If part of your career path involves moving, you may not want to buy in homes for sale in Boston. With moving expenses and real estate commissions, unless you have a significant amount of cash, or are in an industry that will buy your home in the event of a work-related relocation, buying now might leave you scrambling to finance a move in a few years. Even the old advice of holding a property for at least five years might not work in a market as expensive as Boston.
If you’re willing to play landlord or work with a property manager, a buy and hold strategy might work if you keep the home and rent it out in the event of a move. Even then, though, your carrying costs are likely to be high and a couple of months of vacancy could be a major hit on your savings. In addition, it could complicate things if you decide you want to buy in your new hometown.
Do you like to decorate? If your interior design aesthetic is important to you, buying may be preferable to renting since you are often fairly limited in what you can do in a rental in terms of paint or other changes. Looking for ideas to make your rental a little more “yours”? Check out our blog on decorating your rental for some ideas that will keep both you and your landlord happy.
Are you handy around the house? One of the great aspects of renting is that when there’s a leak under the sink or a broken appliance, you can call the landlord for help. When you own your home, you’re on your own when pipes go bump in the night. That can mean big bills for repairs as a homeowner. If buying the home will take up all of your cash reserves, you might want to think about renting for a little longer since it will be vital for you to have some money in savings for unexpected repairs.
Do you need consistency? Here it’s a wash since a fixed-rate home mortgage will give you the consistency you crave, but unexpected repair bills can undermine that plan. As a renter, you are subject to rising rental rates and could find yourself priced out of the market. The compromise? If you find a rental you love, sign on for the longest lease terms available to avoid a rent hike 12 months from now.
Rent vs. Buy is a complicated question in many markets, but in Boston the big-bucks housing market makes it even more difficult. The good news? If you decide that renting is the way to go, you’re already at the best site for renting in Boston and the Boston metro area. Whether you’re looking in Boston proper, in Quincy or Cambridge, or in one of the other surrounding communities, we have the deepest inventory of rental properties available.
Have a pet? Looking for a luxury apartment in Boston? Want to be convenient to campus? We can accommodate all of your preferences through a search that’s custom built for the way you live. Contact us today to find a local agent who knows this area and is ready to get to work for you right away.