I had a conversation with a Boston apartment renter the other day and she told me she was uncomfortable about buying a Boston condo because of the obligation of a 30 year mortgage. I told her she had to realize that, unless you are living with your parents rent free, you are paying a mortgage – either your mortgage or your landlord’s.
In a recent paper from the Joint Center for Housing Studies at Harvard University explains:
“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”
In addition, if you purchase a Boston condo with a 30-year fixed rate mortgage, your ‘housing expense’ is locked in over the thirty years for the most part. If you rent, the one guarantee you will have is that Boston apartment rents will increase over that same thirty year time period.
As an owner, the mortgage payment is a ‘forced savings’ which will allow you to have equity in your Boston condos so you can tap into later in your life. As a renter, you guarantee the landlord is the person with that equity.
If you would like more information on the Boston condominium market and on the benefits of owning please call me at 617-720-5454.