With the slide of real estate values over the last five years and declining vacancy rates, it is now cheaper to buy a duplex than rent one in most U.S. cities.
According to our friends over at the real estate web site Trulia, in 74 percent of the country’s 50 biggest cities, buying a duplex or home was cheaper than renting.
Of course, there were the usual exceptions in cities like New York and San Francisco, where renting was still the lower cost alternative.
A number of factors have conspired to make this a terrific real estate buying opportunity, like interest rates at or below 4 percent (as of last Friday), and the tax benefits of property ownership like the mortgage interest deduction and ability to write off the part of the duplex you don’t live in.
Leading the way as the best city to buy a property rather than rent was Las Vegas, where the median price of a two bedroom, two bath condo or townhouse was around $60,000. This translates to monthly mortgage payments of $256 on a 30-year fixed loan at 5 percent interest. Throw in additional expenses like association fees and property taxes of around $300 a month, and the $556 total is still well below the market average for a comparable rental of $810 a month.
While Minneapolis and St Paul duplexes didn’t win the national affordability index, the Twin Cities nonetheless did finish with a ranking that indicated it is better to explore the option of owning rather than renting.