When it comes to living arrangements, one of the big questions you have to answer is if you’re going to rent or own. If renting is the best option for you, then pay attention: Washington is one of the most renter-friendly states in the nation!
Here are Five Fast Facts on the most renter-friendly locations:
- 🤓 The Background - A recent study from a couple of universities looked at the relative cost to rent or buy. They compared the ratio of a city’s average home purchase price to the average annual rent. The higher the price-to-rent ratio, the more it suggests renting over owning because homeownership is (relatively) more expensive.
- 📊 The Data - The study looked at the biggest 100 cities across the country using data from Zillow. All cities favored renting over buying, which suggests that the cost of homeownership is rising everywhere faster than the cost of renting. The proverbial American Dream ain’t cheap (especially now)!
- 🏆 The Win - Spokane had the second highest rental premium in the country, with 23.32%. This means the cost of buying a home is higher now (compared to renting) than the historical average.
- 🤏 The Caveat - Just because renting is relatively less expensive than homeownership, that doesn’t mean it’s actually affordable. Rental costs are really high…just not quite as high as buying. Pretty much every living situation is painfully expensive right now.
- 💰 The Big Picture - Keep in mind, you’ve got three options: rent at a lower cost and invest the difference, buy and build equity, or rent without saving or investing. The first two will end up with roughly the same wealth creation results; the third is a killer to your long term financial wellbeing.
🔥Bottom line: Renting may not be for everyone, but for those who are looking to rent, it appears the old real estate saw applies here, too: location, location location!
What’s been your experience with renting?
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