For anyone looking to live in the D.C. area, a simple search will tell you that rent prices are high. RentCafe lists the average monthly cost of renting a two-bedroom apartment in D.C. at $2,532. That’s over $30,000 spent annually on rent. So how does this compare to purchasing a new home in a D.C. suburb like Bethesda?
According to Realtor.com, the median list price of new construction homes for sale in Bethesda is $1,062,765. However, the Burch model townhome at Montgomery Row is currently priced starting at $754,900. The Burch features 3-4 bedrooms, loft space, a rooftop terrace, garage parking and approximately 1,678 square feet of living space on four levels.
So, what would the monthly payment look like on the Burch townhome? Using Zillow’s Mortgage Calculator, a 30-year fixed loan with a 20 percent down payment and an interest rate of 4.5 percent would be approximately $4,001 per month, including interest, taxes, and insurance (this may be even lower with potential after-tax savings).
How would this compare to renting long-term? According to Zillow’s Rent vs Buy Calculator, using the cost of the Burch townhome and assuming your current rent in D.C. was the average of about $2,500, buying would be the cheaper option after a period of 4 years and 8 months.
Ultimately the choice of continuing to rent or buy is a personal decision. If you see yourself moving around a lot in the next few years or changing jobs frequently, renting may be the better option regardless of costs. But if you see yourself staying in one place with a stable job, investing in a home may be the right choice financially.
Owning a home builds equity as you make monthly payments on your mortgage and it may also offer tax benefits because the interest payments on your mortgage (as well as certain other costs) are often tax deductible. Rather than spending money that you’ll never get back on rent, you will be making a solid investment that will benefit you down the road.
Montgomery Row is located within walking distance from the Shops at Wildwood, Westfield Montgomery Mall, and the highly ranked Walter Johnson High School. The community features an onsite park and playground and offers a free Montgomery County shuttle to the Metro.*
*Shuttle service is provided by Montgomery County during weekday rush hours and is subject to cancellation without notice.
This article originally published at https://dc.urbanturf.com/articles/blog/cost-comparison-renting-in-dc-vs-buying-a-new-townhome-in-bethesda/14406.
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