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The Cost of Renting vs Buying in DC
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A lot of people think that owning a home is more expensive than renting, but this isn’t the exact truth. There are a lot of benefits to buying a home, and sometimes it can be less expensive than renting.
In the spreadsheet, I have chosen a home with a monthly payment of $3,500 dollars. This is a similar payment you would make on a nice two bedroom condo in the area. Over the course of five years you would pay $232,076 if you were renting, and you would pay $223,406 if you were buying.However, when you buy, that invested money goes back into your pocket.
When you pay rent, you’re basically just throwing money away. You’re paying someone else’s mortgage off, so why not pay off your own? At the end of the 30-year loan on this home, you would have a $750,000 property in your portfolio. If you rented, you would have nothing to show for spending all of that money.
I often help buyers decide whether they should rent or buy. I think it’s always better to buy unless you’re going to be moving quickly. Rental prices are only getting higher, and interest rates are supremely low right now.
Please don’t hesitate to contact me if you have any questions or feedback. I look forward to hearing from you!