To Rent or buy in Boston?

The Good and Bad News

There’s good news and bad news about the decision to rent or buy your home – the good news: its an easy decision when you’re in college and/or recently graduated (9.5 times/10, rent) – the bad news: as you get further from your early twenties, the decision to rent or buy gets more complicated.

For anyone looking to seriously crunch the numbers, the New York Times has a comprehensive tool to mathematically compute whether you should rent or buy.

An issue with using this tool is that you must answer/consider questions that don’t have definite answers, most importantly, how long you are going to stay in a single location.  Things like job stability/mobility, your personal and family life fluctuation, future income projections, inflation/interest rate uncertainty, and a host of other unknown factors, make it an easier decision to rent now and buy later.  Renting is often the right choice for those newer to the workforce, but as income increases and becomes more stable, the decision to continue renting becomes more difficult.

When to consider Buying

We know that renting offers the flexibility to commit for 12 months at a time to an apartment, and for many people, this is a huge perk.  However, there are some reasons why buying might be the right choice for you:

  • If you’re looking to start a family or settle down in a bigger space, or at least in a different location, buying will generally offer more stable options
  • Building home equity – build your ownership stake in your own property instead of paying rent to live in someone else’s property
  • Consolidating your other debts with a home equity loan (an in-depth explanation of home equity loans and debt consolidation here).
  • You have enough money for a down payment (in Boston, the average down payment is $100,000, and the industry standard is to put 20% of the price of the new home down upon sale)

Don’t be afraid to rent until buying makes sense

If these reasons to buy don’t resonate with your current situation or mindset, don’t worry about it.  Renting should not be thought of as missing out on buying.  Renting allows people to be flexible, to be undecided, and to get the timing of what will likely be your biggest investment (your home) right.  Temporary uncertainty can be your greatest ally for the future, so don’t shy away from it, rent on!

A photo I took from the top of the Prudential building.  The city really comes alive at night.

Insider’s tip: Try to get a different perspective on neighborhoods you are considering living in by going out for dinner to a local establishment, talking with current tenants, or going somewhere high up as I did in this photo of Boston – perspective throughout your apartment search is key!