To Rent or Buy a Home, That is the Question

One of the most common calls I get from families looking to rent is that of a past Long Islander who relocated to Florida (or North Carolina) who now would like to come back home.

Often they’re looking for a nice 3-bedroom house to rent. Let’s face it, not everyone wants to own or is in a position to buy a home for many reasons. Maybe they’re trying to sell a home somewhere else, as is sometimes the case with families who have recently gone south. Maybe they anticipate future job changes or simply know that they don’t want the responsibilities that go with homeownership.

What do these types of renters find if they call a real estate agent to help them rent a home?

Well, in Port Jefferson, on Multiple Listing Service on the day I checked there were no 3-bedroom single-family homes for rent.

There was a 3-bedroom, 1.5-bath just rented for $1950 per month but the house did have an apartment attached, which is rented separately. There was also a furnished 3-bedroom condo in the Highlands development asking $2700 per month.

Broadening the search to Port Jefferson Station opens up a few more possibilities. On MLS, there were five 3-bedroom homes for rent ranging in price from $1850 to $2500. The lowest priced was again a home shared by an additional tenant.

Reports published by Trulia recently show that it also makes sense to rent long-term in some markets where home prices are more than 15 times the annual rental prices. Trulia names New York City and San Francisco as two of these places. (According to The Center of Economic and Policy research, fifteen times is the historic average, so that is where that number comes from.)

Using this as a guide, Port Jefferson walks the line at 15.7 times the annual rent for the average 3-bedroom home. This indicates that our prices are probably right in line with where they should be. And since, there really is no inventory of single-family homes to choose from to rent, this alone may persuade someone to buy if they want to live in the community. Port Jefferson Station, however, is an area that it’s actually cheaper to buy than to rent in most instances with some 3-bedroom home prices in 2010 at only12.5 times the average annual rent.

In response to the recent collapse in home prices, many people have become skeptical that owning is a better option than renting. After all, those who have not owned a home in the past eight years have been mainly unaffected by the downturn.

Historically, millions of middle-class Americans have built wealth by homeownership. I think it’s unlikely this trend will change in the long term unless the government takes steps to prevent lower income families and first time homebuyers from owning homes by discontinuing some of the assistance they currently provide in terms of federally backed mortgages. Only you can determine whether renting or buying is best for you.

While the American Dream is still available to most people with lots of different types of mortgage options available you should take the time to weigh your options to make the decision whether to rent or own.

Amanda Eckart is a licensed Sales Person with Realty Connect USA and Port Jefferson resident. She has over 12 years of experience assisting home buyers and sellers. She can be reached at 631-404-2215  or by email at aeckart@realtyconnectusa.com. Also on the web www.thedownport.com