Buying a Gulf Shores home instead of renting pays off, on average, in about three years. That’s a national average, but seems to hold true in most markets across the nation. This, according to a new analysis from real estate website Zillow.com.
The analysis that Zillow calls the “break even horizon” compares what it costs to buy or rent the same home in a number of U.S. markets over time. Of course, the rent versus buy calculations will vary depending on where you live.
Break Even Point for Buying a Gulf Shores Home
In some markets, the break even point is 4 to 5 years, but in other areas, buying a home wins out in less than 2 years. There are wild markets where residents must wait up to 14 years for buying to make more sense than renting.
The analysis takes into account a host of factors potential buyers should think about when considering the leap, including the down payment, mortgage and rental payments, buying and selling costs, property taxes, utilities, maintenance costs and tax deductions. The analysis adjusts for inflation and forecasts home value and rental price appreciation.
The new study on the old “rent-versus-buy” debate comes at a touchy time for the housing market. Many analysts believe a housing bottom has already been reached but don’t expect a return to the days of the real estate bubble. There is already some concern about the strength of the recovery, with home sales slowing in June as inventory remained tight and buyers paid higher prices.
However, rents are also rising, and housing affordability is at or near record levels, and mortgage rates remain very low, for those who can qualify. The combination of these factors are prompting many renters to consider buying a Gulf Shores home instead of continuing to subsidize their landlord’s retirement.
When trying to decide if buying a Gulf Shores home instead of renting is best for you, decide how mobile you’ll be, your financial situation, marital status, career goals, and your personality. In other words, are you more likely to never want to do maintenance or yard work? If so, renting may be your best option.
If you’re trying to decide whether buying a Gulf Shores home would be your best move, talk to us. We can help you decide which option best suits your lifestyle and your pocketbook.