Boston’s downtown real estate rents are rising. Should I buy this year?
Boston Condos for Sale and Apartments for Rent
Boston’s downtown real estate rents are rising. Should I buy this year?
You may have seen reports in the news recently saying it’s better to rent right now than it is to own your Boston condo. But before you let that impact your decisions, you should understand what these claims are based on.
A lot of the time, these reports are assuming things that aren’t realistic for the average household. For example, the methodology behind one of those reports says that renting is the smarter financial option because of the opportunity to invest money elsewhere. It assumes renters take the money they’d spend on costs tied to buying a home and put it in an investment portfolio.
But here’s the thing – most people who rent aren’t making those investments. Ken Johnson, Co-Author of the BH&J National Price-to-Rent Index, explains:
“One of the difficulties with the rent and reinvest model is many people . . . simply rent and spend the difference. . . . That’s wealth destroying.”
The reason homeownership is one of the best investments you can make is the wealth it helps you build. That’s why there’s a significant difference between the net worth of the average homeowner and the average renter (see graph below):
So, before you renew your rental agreement, think about the opportunity to build wealth that homeownership provides.
If you’re unsure whether to continue renting or to buy a home, let’s connect to help you make the best decision.
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With Boston apartment rents on the rise, should you buy a Boston condo for sale in 2022? If you’re on the fence watch this real estate video below for PBS
All over the country, but certainly, in downtown Boston, renters should be thinking….rents Are rising should I buy this year?
But first, you have to look at why you may be renting a Beacon Hill condo or Midtown condo in the first place.
There can be any number of reasons a person chooses to rent vs. owning their own piece of Boston downtown real estate:
- Freedom to transfer to another city quickly for job opportunities
- Someone else pays the real estate taxes (and gets the deduction)
- Credit issues or debt issues
- Living in a brand new apartment in the Seaport District
- Lack of saved money for a down payment — and misinformation about how much that is
That is just some of the reasons that I’ve heard in the past. But every year, you “roll the dice” as to how much your rent may go up. Maybe that increase keeps you from saving for that down payment?
Boston downtown real estate apartment rents are rising
But when you purchase and own your Boston Seaport condo or Beacon Hill condominium, you obtain many benefits that you may not have thought of.
When you purchase a Boston condo for sale you write that mortgage payment you are working towards paying off your mortgage and building home equity. Not to mention, you get the tax deductions of the cost of purchasing the Beacon Hill home (your first year) as well as the property taxes you pay.
So today, let’s address head-on what are some of your reasons for not buying a Boston downtown condo for sale.
Freedom to transfer to another city quickly for Job Opportunities
Ok, there is truth to that, but also in the current (2019) market with limited inventory, you may be able to sell your home quicker than you might think. There may be the possibility of renting your Beacon Hill condominium in case you think you may move back, or if it does not sell in a time frame you have established for yourself.
Someone Else Pays the Boston downtown real estate taxes
Yes, when you own a Boston Seaport condo, there are property taxes. But you can usually deduct those when you file your income taxes. Also, the interest you pay on your mortgage is tax-deductible!
Credit or Debt Issues
This can be a bit more tricky. But it’s not to say you can’t buy a Boston Charles River Park condo. Credit can be restored (overtime) if you’ve had some tough times in the past. And when you get to a certain point, you can purchase, there just may be added costs like a higher interest rate. Debt issues can sometimes be easily fixed by just paying down, or off one credit account.
Living in a brand new Boston Seaport apartment
Depending on where you want to live in downtown Boston, this might be a real option. In recent years, and in the current market, there are new Boston luxury high-rise apartments being built on almost every corner, especially in the Boston Seaport District. Now, what that monthly rent is…that’s the other story. So you may be living in an older apartment that has not had any recent renovations. But when you purchase a Beacon Hill home or condo, you may find one that has recently had a major renovation or at least have things like all new appliances. Much of this will depend on where you are looking to live, what you can afford, and what is on the market!
Lack of saved money for a down payment on a Boston downtown condo
One of the biggest misconceptions for Boston downtown condo buyers, be you a first-time buyer, or buying your second or third home is the amount of money needed for a down payment. It is not 20% as many people think. Again, your situation will vary based on your credit and your debt to income ratio….but there are loan programs with as little as 3% down payment. By going through the application process, they can see what loan programs are available to you!
Let’s get you started on the path to buying a piece of Boston downtown real estate and begin building your personal wealth.
