To Rent or to Own is a dilemma many folks face especially in Boston and Cambridge metro areas. Yes, it’s not easy to make the homeowner a reality but if you want to make it a reality it is possible. There are many benefits to owning a home vs renting and a few months back I wrote about the pros and cons of renting vs buying and recommend every buyer to read it before they jump into the buying market. When you go into the buying market is always important to have your ducks in a row and there are a lot of experts in your area that can help you from your Local Real Estate Agent, Mortgage Broker, and even your accountant who can help you decide if buying is something you can do and if it makes sense to buy vs rent. It is always nice to build equity when your monthly mortgage payments are going to something vs monthly rent payments which is just going out the window.
I picked a few neighborhoods in Metro Boston and looked at Rentals and then looked at what would be on the market if you were to pay approximately the same monthly payments towards a mortgage. The results might shock you a little bit. Also, keep in mind this is just the start of the season and more inventory will hit the market for sale so if you decide to buy you might need to be patient and really be organized when more comes on market so hopefully you find the home of your dreams
Let’s say you’re paying a monthly rent of $2800-$2900 which in South Boston can get you a One Bedroom or Two bedrooms and you might even be able to negotiate the price down if renting in South Boston to cheaper since there is a lot on the market in the rental market since we have too much supply and not enough demand. If you stay in a rental over 3 years your wasting money if your living in South Boston the smarter decision would be to buy a home. Yes coming up with the down payment might be a challenge but if you are finding the money to pay first, last, SD and Broker fee that is anywhere from 11,000-11,600 you had to save up to move into the place so if you continued to save lets say over a two year span the same amount you would have the down payment for a home depending on what your thinking about putting down. The only way you will really know is to speak with a mortgage broker.
Here is a breakdown if you were paying rent $2800-$2900 a month what you could afford to buy in South Boston
19 Knowlton Street Unit 3 Listed for $399,900 2 bed 1 bath top floor unit with hardwood floors throughout with crown molding, tile bath, HVAC system, tankless water heater, laundry, common roof deck and open layout with a top of the line view.
2 bed 1 bath
Approx SQ feet 652
Central AC, Central Heating
Low Condo fee $97.00
If you were to buy this property your mortgage payment could be even lower than the $2800-$2900 a month rent.
If you looking for something a little bit more renovated in
South Boston 322 Athens Street unit 5 might be something worth looking at 1 bed 1 bath located on the top floor in a small building with only six units. Great city views from living space, Clean and modern Kitchen space with Calcutta quartz countertops, custom backsplash, Updated bath with chrome fixtures, herringbone Calcutta floors, deep tub, spacious bedroom with nook, oversized windows with ample closet space. 322 Athens Street is listed for $469,000
1 bed 1 bath
Approx square feet 614 square feet
Forced Hot air
Low Condo Fee $200 with water sewer, and master insurance
Depending what you put down for a down payment your monthly payments could be as low as $2300 a month or as high as $2900 a month approx and could lead to a savings of $1100-$1300 a month in savings.
Maybe you’re wanting something in South Boston that offers you updated finishes and a little bit the square footage
188 Bolton Street unit 2 for $499,000. Depending what the current market conditions look like your agent might be able to bring the price down slightly where you could not only see more savings but lower monthly mortgage payments. This unit was Renovated to the studs offers an open kitchen, dining room and living room space, 2 bedrooms and 1 full bath, Central A/C Hardwood floors, Laundry in unit, Private rear deck, gas fireplace, wall of windows, kitchen and granite counter tops and storage in the basement.
2 bed 1 bath
Approx Square footage 750
Central A.C Forced Air and Gas
Low Cond Fee $150 which includes water, sewer, and master insurance
If you put down 10% or 20% down for a down payment without neg the price your monthly payments could be as low as $2385-2800 range and see huge savings as well
Maybe South Boston isn’t where you want to call home, but South End or Bay Village is more your style and you typically pay in rent 3,000-3700 a month in monthly rent that isn’t doing anything but going out the window. If you know you’re going to rent for 3 years and paying a monthly rent it is cheaper to buy then rent according to realtor.com. If your paying on the higher spectrum of rent it doesn’t change that much either. If you were looking to buy a home most likely you would be in the price range of mid to high 500,000 range. At the time of this blog, we were just at the start when sellers start to list in the new year to sell their homes so I couldn’t give active properties on market so what I have done instead is pulled properties that sold in that price range and market data as well to show if you bought what one could potentially buy.
796 Tremont Street unit 4 was listed for $489,000 and sold for $515,000 Top floor unit offering tons of light, granite counter tops, stainless appliances, private roof deck, Free laundry.
Square Footage 704
Heating Hot water baseboard and Central A/C
Condo Fee $250
If you bought this unit you could stand to save anywhere from $900 to $1300 in monthly savings and have your monthly payments be less than 3,000 a month in rent. That is a serious saving. Most the homes a buyer must keep in mind in the south end are being priced well and selling for above asking.
I pulled 68 Appleton street unit C it was listed for $495,000 but sold for 520,000 if it had sold for $495,000 you could see a mortgage payment in the range of $2300-$3100 and be building equity at the same time.
If you are a person who likes to keep some things consistent and paying the same every month and every year and building equity, getting tax benefits then buying is the way to go. You might be saying well interest rates are rising I can’t get as much house as I could a year ago that is true, but prices can go higher and interest rates can rise further which can affect how much house you can buy. When you rent it’s rare that your monthly rent stays the same for a year or eighteen months. It typically goes up, you don’t get the same tax benefits as a homeowner, you’re certainly not putting it towards anything it’s pretty much going out the window. If you know you can make a commitment to where you live for over 2 years becoming a buyer is the best thing for you financially. If you would like more information on entertaining the idea in 2017 to becoming a homeowner contact me. I am happy to help you from start to finish. If you would like a detail report for another neighborhood in the city or outside the Metro Boston Cambridge area I am happy to help you. Understanding buying a home is not just for the few it’s for anyone who really wants it. Contact me today and stay tuned to when I do a breakdown of rent vs owning if you were to buy in Beacon Hill and Back Bay.