- Michael E. Kanell The Atlanta Journal-Constitution
If you feel like now is the time to buy a house, then where is the place?
When it comes to finding the place where it makes the most financial sense to buy rather than rent a home, two counties near metro Atlanta rank in the top 10: Walton and Hall, according to report by a personal finance company.
Turns out that you’re better off buying in the city of Atlanta only if you plan to own the house for at least 4.1 years. It takes that long to get to the point where upfront costs even out so that you’re spending less money than if you had rented. That’s a long time compared to say, Philadelphia, where home prices are – relatively – cheap versus rents and you can get your money’s worth in 2.9 years.
Atlanta itself ranks just below the national average, according to the report by New York-based SmartAsset.
But compare that to New York City, where you’d need to live in a home for more than 18 years to justify buying.
Financially, the choice between renting and buying involves a rough kind of calculation, an equation balancing costs and time. And sometimes the numbers say you should rent not buy, even though owning a house is usually cheaper than renting a place of similar worth.
Mortgage payment is typically lower than rent of a similar property, even if you add in the average cost of repairs. And there’s the tax benefit from making mortgage payments.
But buying, well, that’s the rub. When you buy a house, you’ve got to plop down a down-payment and generally come up with closing costs.
So in the very short run, renting is almost always cheaper.
In Walton County, the average monthly mortgage is $603 – less than half of the average monthly rent of $1,383, according to Smart Asset. In Hall County, the average monthly mortgage is $629, compared to an average rent of $1,091.
But the average home price in Walton is $250,249. The average in Hall is $203,068.
So a buyer who makes a down payment of even 10 percent has to put up $25,000 in Walton and $20,000 in Hall before the first mortgage payment. And that doesn’t include closing costs and repairs.
But eventually – all else being equal – the lower cost of owning will outweigh the savings from not buying.
Where that point is depends on where you buy.