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 Arlington condo, the difference between owning and renting appears slight.
The one-bedroom, one-bathroom unit is listed for sale at $420,000, or you can rent it fully furnished for $2,200 a month. Built in 2007, the 690-square-foot apartment is in the 1800 Wilson condominium, which is located between the Courthouse and Rosslyn Metro stations and near shops and restaurants in Clarendon and Georgetown. There are hardwood floors in the main living area and carpeting in the bedroom. The kitchen has granite countertops and stainless steel appliances. A stacked washer and dryer are in the unit. A parking space is included. The pet-friendly building has a gym, lounge and courtyard. The listing agent is Berna Able of Ratterree Realty.
The Zillow data assumes that a buyer would have a credit score between 700 and 719, make a 20 percent down payment of $84,000 and take out a 30-year fixed-rate mortgage at the rate of 4.2 percent. Taxes, condo 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: $420,000
Monthly principal and interest: $1,651
Monthly taxes: $277
Monthly home owners insurance: $67
Monthly condo fee: $313
Estimated total monthly costs when buying: $2,308
Monthly rent: $2,200
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