Nancy Simmons Starrs is founder and president of Apartment Detectives, a D.C., Maryland and Northern Virginia apartment search service.
In this current market, there are many factors to consider when deciding whether to rent or buy a home. We decided to look at this condo in D.C. that is listed both for sale and for rent to compare what might be the best in terms of monthly cost.
This renovated one-bedroom unit at 2111 Wisconsin Ave. NW #421 is listed for sale at $369,900 and for rent at $1,895 a month. The unit, constructed in 1988, has 693 square feet and is in Observatory Circle, an easy walk to Georgetown restaurants and shops.
The unit has wood floors in the living areas as well as a balcony with a view of the Washington Monument and an outdoor pool. The kitchen has granite countertops with stainless-steel appliances. The bathroom has been renovated, and a washer and dryer are in the unit. One garage parking space is included in the price.
Amenities include a fitness center, an outdoor pool, 24-hour security, front desk in the lobby and a meeting room.
This is a very basic calculation to give people who are weighing the decision of buying or renting a comparison of monthly costs. Anyone considering a home purchase should talk to a lender who can tell them what their mortgage options would be with their specific financial situation.
Your personal financial situation will effect the interest rate available to you. The lower the interest rate, the lower your mortgage payment will be. So it is best to call a lender to know what will make financial sense for you.
Our calculation is based on a buyer making a 20 percent down payment of $73,980 and a 30-year fixed-rate mortgage of 3.75 percent. Taxes, condo fees and an estimated insurance premium are included in the calculation. The tax benefits of buying are not included. Anyone considering buying a home should consult a tax expert for this data.
In this case, with this interest rate and down payment, it looks like renting offers a lower monthly cost. If you don’t know if you are going to be in the area longer than a year, then renting might make more sense for you.
Here’s the breakdown:
Sales Price: 369,900
Monthly principal and interest: $1,370
Monthly taxes: $289
Monthly home owners insurance: $120
Monthly condo fee: $683
Estimated monthly costs when buying: $2,463
Monthly rent: $1,895
A rent or buy calculator at Realtor.com is another tool to help in understanding if a home purchase or renting a home makes financial sense for you. There are many factors you need to take into account, including how long you would plan on keeping the home.
This also does not take into account, the tax benefit of buying a home and that these monthly payments are going toward a home that you will be able to sell down the road rather than having the rent dollars not go toward an investment in your financial future.
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