It is time for another episode of everyone’s favorite realty-based game show: “To Rent or To Buy, That Is The Question!” Renting versus buying has been discussed ad nauseam, but this new twist changes everything; this is the million dollar homes edition, where the costs are higher, the stakes are raised, and the outcomes are anyone’s guess! So come on down and spin the housing market wheel of destiny to discover once and for all if it is better to rent or to buy, because that truly is the question.
Would it be that surprising if a game show was made out of the rent vs. buy question at this point? It is a question that never seems to go away as there is a seemingly infinite number of variables associated with it. Well, here is one more variable; what if the properties one is looking to rent/buy are luxury properties?
For a majority of people in the country, it is less expensive to buy than to rent, but for high-end properties, it looks as though this might be reversed. If empty nesters are looking to sell their large, expensive suburban homes and head to a rental property in the city, they often times find they can’t get nearly enough space for their money to make the move viable. What about a rental in the suburbs, though?
As it turns out, the number of rentals for luxury properties, especially in the suburbs, is growing. As people are getting priced out of downtown areas they head back to the suburbs, and instead of buying another home right away, they are renting single-family homes.
The problems with buying is a million dollar mortgage will lead to the borrower paying about $4,700 a month plus property taxes, insurance, and maintenance. All of that adds up to about three times the average rent for the same property, and that doesn’t even include the down payment. This means that once again, there is a new wrinkle thrown into the ever-present debate of renting versus buying.