Did you know? Purchasing a property for your children to live in when attending College or University in certain cities can actually save you money as opposed to renting. Well it is absolutely true. In cities where there is a bustling College life there is often a substantial difference between the rent and mortgage rates that one would have to pay on a monthly basis.
Realtor.com just enacted a study looking at the cities where the top 25 Universities according to the latest U.S. News & World Report's annual school rankings are located. From here the Real Estate markets in these locations were measured against one another with the average rents achieved for a property acquired from the data supplied by Rentbits.com. In addition, mortgage rates were then determined for the median priced properties in each location judging by what is available on Realtor.com and assuming a 30-year-fixed mortgage with a 20% down payment and an average interest rate seen today being 3.6%.
The rankings below are in order for which city has the highest rents relative to the average mortgage payment one should expect to pay for comparable median priced properties. The difference between the rent and mortgage in each locality is also mentioned below:
- Boston - 248.7%
- Chicago - 226.4%
- Pittsburgh - 215.8%
- Princeton, NJ - 209.8%
- Atlanta - 182.6%
Here in Boston we have over 100 schools that consist of more than 250,000 students; Boston truly is College-Town-USA. With the economy improving especially on the local level and with such a high demand to be in Boston on a temporary basis due to our array of world-class schools and hospitals, rents are extraordinarily high. How high to be exact? $3,084/month is what an individual is tasked with paying for a median priced property which is determined to be $334,900. Looking to this same type of property if one were to purchase it, the monthly mortgage bill would only run them $1,240; a fraction of the rental cost.
So what does this tell us? Evidently it is a better decision to buy than it is to rent in Boston. For investor purposes, not only is it a wonderful opportunity to purchase property but even to rent property with how high the rental fee's currently are. With the Real Estate market on a serious rebound and with prices beginning to climb, it only makes sense that now is the time to buy if one is looking to make a solid investment that will last for the prolonged future; even Warren Buffett agrees.
More Information: The Street