In this market, it’s not always easy to tell whether it makes more sense to rent or buy. With the help of Zillow, a real estate information Web site, we decided to compare a property that is listed both to rent and to buy and see which is the better deal. In the case of this Reston townhouse, owning appears to be a less expensive option than renting.
The three-bedroom, three-bathroom home is listed for sale at $329,000, or you can rent it for $2,800 a month. Built in 1976, the 1,636-square-foot townhome is in the Woodwinds community, near Reston Town Center. The three-level home has hardwood floors on the main level and carpeting on the upper level. The large living room includes a wood-burning fireplace. The rear balcony overlooks a grove of trees and a picnic-table patio. The condo fee covers roof maintenance and lawn care. The seller is offering to pay six months of condos fees. The listing agent is Kim Barber of Re/Max Allegiance.
The Zillow data assumes that a buyer would have a credit score between 700 and 719, make a 20 percent down payment of $65,800 and take out a 30-year fixed-rate mortgage at the rate of 4.17 percent. Taxes, home owners association fees and home owners insurance (an estimate based on insurance premium data from the National Association of Insurance Commissioners) are included in the calculation, but not the tax benefits of buying (e.g., mortgage interest deductions).
This rudimentary calculation is meant to give potential buyers or renters a snapshot of the costs involved with buying or renting a home. It is not meant to be a comprehensive accounting. Anyone considering a home purchase should also take into account the tax benefits available as well as other factors such as how long they intend to live in the home. Read more about the advantages and disadvantages of buying and renting here.
Sale price: $329,000
Monthly principal and interest: $1,283
Monthly taxes: $266
Monthly home owners insurance: $62
Monthly home owners association fee: $469
Estimated total monthly costs when buying: $2,080
Monthly rent: $2,800