10 Cities Where Real Estate Investments Are Total Wastes of Money
If you rent the property where you live, you undoubtedly have heard this from well-meaning friends and relatives: “You’re throwing your money away on rent. You really should buy a house!”
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But should you? That depends on a variety of factors, starting with where you live.
A study by Today’s Homeowner looked at the cost of buying vs. renting in 97 major cities and found that renting is cheaper than buying in 46 of them – and the money you’d save by renting could be considerable.
For the study, Today’s Homeowner looked at the big picture of the cost of home ownership, including: the average sale price of homes from July 2022, using data from Redfin; property taxes, based on figures from the U.S. Census Bureau’s American Community Survey; average maintenance costs, with estimates from Angi; interest rates, sourced by Freddie Mac; and the price of homeowners insurance premiums with figures from Quadrant Information Services.
When all 97 cities are considered, homeowners will spend an average of $1.30 million over 30 years, while renters will pay an average of $1.26 million.
Nowhere is the comparison between the costs of homeowners vs. renters more stunning than in California, home to seven of the 10 cities where it costs far more to buy than to rent.
Cities Where It Costs Much More To Own a Home Than To Rent
So what are the 10 cities where your investment in real estate could be considered a waste of money? Here they are.
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Austin, Texas
Cost of Owning: $1,626,126
Cost of Rent (30 years): $1,247,485
Difference Between Paying Rent for 30 Years and Owning: Minus-$378,642
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Anaheim, California
Cost of Owning: $2,122,069
Cost of Rent (30 years): $1,720,907
Difference Between Paying Rent for 30 Years and Owning: Minus-$401,162
Madison, Wisconsin
Cost of Owning: $1,188,399
Cost of Rent (30 years): $768,155
Difference Between Paying Rent for 30 Years and Owning: Minus-$420,184
Arlington, Virginia
Cost of Owning: $1,968,567
Cost of Rent (30 years): $1,388,185
Difference Between Paying Rent for 30 Years and Owning: Minus-$580,382
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Long Beach, California
Cost of Owning: $2,029,029
Cost of Rent (30 years): $1,416,371
Difference Between Paying Rent for 30 Years and Owning: Minus-$612,657
Los Angeles, California
Cost of Owning: $2,523,447
Cost of Rent (30 years): $1,848,268
Difference Between Paying Rent for 30 Years and Owning: Minus-$675,179
San Francisco, California
Cost of Owning: $3,317,345
Cost of Rent (30 years): $2,414,923
Difference Between Paying Rent for 30 Years and Owning: Minus-$902,422
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San Jose, California
Cost of Owning: $3,420,113
Cost of Rent (30 years): $2,229,374
Difference Between Paying Rent for 30 Years and Owning: Minus-$1,190,738
Fremont, California
Cost of Owning: $3,413,814
Cost of Rent (30 years): $2,213,767
Difference Between Paying Rent for 30 Years and Owning: Minus-$1,200,047
Irvine, California
Cost of Owning: $3,380,897
Cost of Rent (30 years): $2,059,319
Difference Between Paying Rent for 30 Years and Owning: Minus-$1,321,578
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Cities Where It Costs Much Less To Own a Home Than To Rent
But where can you turn if you want to own your home, and pay less than rent? The Today’s Homeowner study identified these 10 cities.
St. Petersburg, Florida
Cost of Owning: $1,121,868
Cost of Rent (30 years): $1,411,382
Difference Between Paying Rent for 30 Years and Owning: $289,514
Detroit, Michigan
Cost of Owning: $436,767
Cost of Rent (30 years): $738,003
Difference Between Paying Rent for 30 Years and Owning: $301,237
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Cleveland, Ohio
Cost of Owning: $448,720
Cost of Rent (30 years): $763,273
Difference Between Paying Rent for 30 Years and Owning: $314,553
Tampa, Florida
Cost of Owning: $1,203,436
Cost of Rent (30 years): $1,531,254
Difference Between Paying Rent for 30 Years and Owning: $327,818
Jersey City, New Jersey
Cost of Owning: $1,853,594
Cost of Rent (30 years): $2,193,182
Difference Between Paying Rent for 30 Years and Owning: $339,588
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New York, New York
Cost of Owning: $2,093,789
Cost of Rent (30 years): $2,483,133
Difference Between Paying Rent for 30 Years and Owning: $389,344
Baltimore, Maryland
Cost of Owning: $723,868
Cost of Rent (30 years): $1,144,127
Difference Between Paying Rent for 30 Years and Owning: $420,259
Miami, Florida
Cost of Owning: $1,626,650
Cost of Rent (30 years): $2,059,606
Difference Between Paying Rent for 30 Years and Owning: $432,955
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Chula Vista, California
Cost of Owning: $1,993,324
Cost of Rent (30 years): $2,474,909
Difference Between Paying Rent for 30 Years and Owning: $484,585
Nashville, Tennessee
Cost of Owning: $1,245,503
Cost of Rent (30 years): $1,917,871
Difference Between Paying Rent for 30 Years and Owning: $672,369
This article originally appeared on GOBankingRates.com: 10 Cities Where Real Estate Investments Are Total Wastes of Money