Buying urban property can be highly competitive, not to mention expensive. Usually it only makes financial sense to invest in urban areas if you are planning on living there, although there are some exceptions to the rule. A recent report by SmartAsset has identified large cities in the US where it can be financially easier to buy property rather than renting, even if you are not planning on settling down.
By figuring out the “breakeven point” – the amount of time it takes for the combined costs of renting to become higher than the combined costs of buying, the report worked out the biggest cities in the US with the lowest breakeven points.
In order for it to be worth your while purchasing a home in a highly-desirable city such as New York, for example, you need to live there for the next twenty years. This is the “breakeven point” for those who wish to purchase in the big apple. Luckily there are much more affordable cities to buy in if you’re relocating to the states. Take a look at the top 5:
- Austin, Texas – As the 11th most populated city in the whole of the United States, Austin has a relatively low breakeven point at just 3.7 years. Monthly rent here averages out at $1,454, while mortgage payments are almost half of this figure, at just $742 a month,
- St. Louis, Missouri – If you wish to live with spectacular views of the Missouri river and its iconic Gateway Arch, purchasing property here will set you back roughly $164,493. It will take you just 3.6 years to reach the breakeven point.
- Dallas, Texas – Another southern gem with a low breakeven score of 3.2 years. Average rent in Dallas is $1,302, while average mortgage repayments work out $708 cheaper, at just $594 a month.
- Philadelphia, Pennsylvania – The largest city in Pennsylvania and steeped in history, the average home here sells for a surprisingly low $157,802 and has a breakeven period of 2.9 years.
- Detroit, Michigan – 2.6 year breakeven point. Monthly rent in Detroit is an average of $1,206 a month but mortgage repayments work out roughly three times cheaper at just $432! Enough said.