Renting vs Buying: What is Right for You? 02/06/20

Renting or buying, buying or renting? In this saturated market, the decisions can seem overwhelming. Different generations of Bostonians from Millennials to Baby Boomers are seeing a myriad of new multifamily housing options arising. Job transfers or other circumstance may force others who thought they were situated to face these tough options.


Renting vs Buying

“You should really buy something,” are words that most 30-somethings are likely hearing from their oft meddling parents.  This trend, however, may not just be affecting millennials but is a sign of the times as real estate continues to be considered a sound investment. With rising property values coupled with the fact that much of the new product on the rental market is focused on luxury, why wouldn’t you want to turn $3,000+ into a mortgage payment instead of rent?

Budget is, of course, a decision driver. With 6 Massachusetts zip codes coming in as some of the most expensive in the country (according to Property Shark), many in the younger generation may not have the necessary down payment to buy into one of these neighborhoods. Just look at Boston’s 02199 area (a subsection of Back Bay), the 3rd  most expensive zip code in the US. The average sale price of a unit here is nearly $4.75 million; hardly a starter home!

Mortgage rates also have a huge impact on this decision, as does steady income and solid credit history. There is also the fight for cash offering and more-than-healthy downpayments. Are you prepared to have the classic 20% down expectation covered as well as waiving financing and/or an inspection just to be “competitive?”  These all seem like elementary things to consider but are all part of the equation.

Renting, on the other hand, offers more flexibility.  If a job were to transfer you to a different state, you likely would not want your owned property to try different neighborhoods before biting the bullet to purchase.  If you have purchased your property, you then have an investment on hand and can ideally profit from the resale in the future.

Buying presents more unexpected costs for maintenance and repairs, while renters have less worry when a landlord takes care of these headaches.  Rent lines the landlord’s pocket for more “worry free” living, by design. Renting allows you to take advantage of luxurious amenities, and not to mention, style in unique buildings such as The Cosmopolitan, in the South End, a converted church.  The Cosmopolitan will have classic features remaining intact of its facade with many modern interior offerings for residents to brag over a cocktail after move-in.

Selling or Becoming a Landlord

Considering selling but not sure you want to pull the trigger?  Selling a family home can be a very emotional decision however empty nesters who no longer need the space or upkeep of a larger home may consider moving to a condo or active adult community.  Becoming a landlord may be the right decision for those who want to hold onto their asset, however, they are many factors to consider when making this choice. Who will answer a maintenance call at 2 AM or deal with a tenant who has not paid their rent? Of course, a management company can handle these issues for you but at a cost.

Most important may be the current market conditions. Has your property increased in value? If you own in Boston, chances are it has.  According to Zillow, average home values in Boston increased 6.6% over last year. However, they are also predicting another year of increases so do you wait for the market to get even better or will the bubble eventually burst? If you’re going to rent out your property you also have to consider if the the rent will cover the costs of a management company, taxes, and other upkeep and holding costs.

With over 40 collective years of experience at The Piracini Group, we can help property owners in offering their asset to either sell or to lease. We can present a comprehensive market analysis for your area to decide if you should hold onto your asset and explore the role of being a landlord, or to sell and profit from your previously smart investment.  No matter which direction you choose, industry experts at The Piracini Group have your back. Contact The Piracini Group now to explore the first steps.

Contributor Bio

The Piracini Group is a luxury real estate team within Coldwell Banker Residential Brokerage. TPG has over 20 years of experience in marketing & selling new home communities in Boston and the surrounding areas. They represent builders and developers in providing sales solutions for new developments, rehabs, and conversions from market analysis through closing.

They are passionate about delivering the best service and the best results.

They build strong working partnerships with their developer clients, and they welcome the opportunity to meet with you to present in detail how they can ensure that your project achieves the greatest success possible.

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