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Renting vs Buy in DC/McLean?


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2009 Sep 3, 7:37am   2,288 views  9 comments

by MelAdams   ➕follow (0)   💰tip   ignore  

I am currently renting a 5BR in McLean for $2500 which is a good price. Rents are usually closer to 2800-3000.
My landlord offered to renew the lease for the same rent $2500 for 2 more years. I am tempted to buy a nice 4 BR house in McLean for 660K but i need help crunching the numbers. The mortgage rate is 5.3% and that makes the rent vs buy ratio at 5.45%. This is a high ratio but it is McLean and there has not been much of a housing crisis here. Would anyone with some knowledge of the housing market in McLean/DC be willing to shed some lights on those numbers?

#housing

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1   StillLooking   2009 Sep 3, 7:47am  

Shouldn't a 660K house rent for $6600/Month?

2   permanent_marker   2009 Sep 3, 8:14am  

have you seen the Rent Vs Buy Calculator ?
http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html?_r=2&oref=slogin

might get you started in the right direction

3   MelAdams   2009 Sep 3, 8:17am  

I did see the NY times calculator and it says Buying is bettern than renting after 19 years. I don't think i will stay that long in the house.

4   StillLooking   2009 Sep 3, 8:37am  

I ran your numbers in that calculator and it said it is never better to buy with $2500 rent on a $660,000 house.

5   MelAdams   2009 Sep 3, 8:42am  

you have to change the advanced settings on the right to adapt to one's situation. Income tax rate for instance seems to have a big weight in the equation.

6   LowlySmartRenter   2009 Sep 3, 8:44am  

Word to the Wise: "Homeowners Become Landlords"
http://tinyurl.com/ngsvyo

The article is hardly earth shattering news, just more support for the song that Patrick has been singing for a while (and I'll admit, for me, some schadenfreude).

7   MelAdams   2009 Sep 3, 11:36am  

The dilemma is that most of the news don't apply for the DC area. The job market is strong, people from one administration are replaced by others, soldiers are relocated, ... So this create a demand for house but i still feel that houses are overpriced and thus the conundrum.

8   zzyzzx   2009 Sep 9, 2:13am  

The dilemma is that most of the news don’t apply for the DC area. The job market is strong, people from one administration are replaced by others, soldiers are relocated, … So this create a demand for house but i still feel that houses are overpriced and thus the conundrum.

I agree. I suspect that if one wants to buy in this area, that you should wait. Prices will drop more eventually.

9   klarek   2009 Sep 9, 2:47am  

I rent a 3BR in Vienna for $1450/mo. Houses like it are listed in the upper 300's. Will continue to rent until the inevitable price discovery occurs.

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