Deciding whether to buy or rent can be challenging, especially in a tough economy and fluctuating housing market. Historically, this decision-making relied primarily on the mere difference between rent and mortgage payments, combined with how long one expected to live there.
Online real estate database Zillow has developed a more comprehensive comparison that goes beyond just rent and mortgage payments to find the “breakeven” horizon, or the length of time it takes to break even between renting and buying. Their breakeven horizon factors in other costs including down payment, purchase costs, property taxes, utilities, maintenance, and even tax benefits, as well as the costs one would incur if renting the same property.
According to Zillow’s most recent analysis, the Rochester Minnesota area housing market has a break-even horizon of 2.5. Surrounding areas range from 2.5 in Stewartville to 4.1 in Eyota to 13.7 in Elgin.
When making the decision between renting and buying, Zillow’s incredibly in-depth comparison should be just one part of evaluating the big picture. Individual circumstances, recent changes in market conditions, how long one intends to remain in the area, and specific benefits to the properties in question must be evaluated to make the best choice for your situation. Be sure to consult with a real estate professional for current real estate trends and any other factors you should consider in your decision-making.
Shawn Buryska ABR, CRS, GRI
Coldwell Banker Burnet Realty
Shawn Buryska, Coldwell Banker Burnet Realty, Licensed in the state of Minnesota