Should you buy or rent in Newark, NJ?

Whenever you are moving, there is always the question of whether you should be buying or renting a place. That is especially the case in states with a higher living standard where the cost of buying seems too high. So, if you are looking to moving, you first have to decide if you want to buy or rent in Newark. Only when you figure that out can you start looking for moving companies in Newark NJ and arrange a move. Even though it may seem, on the surface, that this is quite a no-brainer, the situation is quite complicated. Both options have their up and downsides. Therefore, let’s jump right into disseminating what is best for you!

Before we begin, let’s talk about the basics!

Before you make a decision and contact residential movers in NJ to arrange a deal, we have to talk about the basics – figuring out whether you should buy or rent in the first place. So, the first thing you have to understand is the price-to-rent ratio. In a nutshell, this ratio shows you how many years you would have to pay a mortgage if the yearly payment was equal to the rent you pay. To figure that out, you first have to look at the average home prices and then at the average rent in the area of your choice. Afterward, you have to divide these numbers and you will get the result.

For example, let’s say that the average home price in a certain area is $100k and that the average renting rates are $2400. So, once you divide the average price by the average rent you will get 41.6, and that represents the number of years it would take you to pay off the mortgage (if we assume the yearly payment is equal to the previously mentioned rent). As a general rule, if this number is 15 or less, it’s a better option to buy than to rent. However, if this number is above 21, it’s better for you to rent. In this example, it’s way better to rent than to buy. With that said, let’s see what the buy or rent in Newark situation is!

How to calculate whether you should buy or rent in Newark?

Applying the same general principle as in the example above, we can see what is more cost-effective. So, the average home price in Newark is $245k while the average annual rent is around $13k. When you divide these numbers you get 18.86 – let’s call it 19. That means that if you buy a home with an annual mortgage payment of $13k, you will pay off your home in 19 years. That is pretty close to the number which you want to avoid – 21. That said, looking at only the numbers when trying to decide whether you should buy or rent in Newark, the simple answer is – rent! However, there is another layer to this story.

What are the benefits and downsides of buying?

Just as packing services in NJ have many benefits, so does buying a home. Many studies show that the first step to intergenerational wealth is to own a home. That said, once you have your own home you can start thinking about creating something for future generations. Of course, you may ask yourself – why should I buy a home? And that is a great question, especially when in the situation where you are trying to figure out if you should buy or rent in Newark. If you are looking to make Newark your permanent home and not move anymore, then buying a home is certainly much better than renting.

But, just like everything, buying has some downsides. First of all, it’s a lot of money. Even though it’s often spread over a large period of time, it’s still quite an amount to spend. Another thing is that if you have to move, you have to go through the hassle to sell the home. So, even though it offers some sense of stability, it can be a burden if the conditions in life require you to move.

What are the benefits and downsides of renting?

Renting often gets a bad rep because “why paying for somebody else’s when you can pay for yours”. However, it has quite a sizable set of benefits. First of all, if you have to move frequently, of course, you are going to need assistance from professional movers NJ, but it’s way better if you rent a home. You can easily leave it behind and move on. This is especially true if you are working certain jobs that mandate frequent relocation. Another thing that we can point out as a benefit, is the fact that you don’t have to invest anything in the property since it’s not yours.

When talking about the downsides, we can’t not mention the fact that it’s true that you are paying for something that isn’t yours. Aside from that, renting offers no stability in the traditional sense of the word. So, your landlord can evict you basically at any time. Even though this doesn’t happen often, it’s still an important factor you have to consider when deciding if you should buy or rent in Newark. With that said, let’s conclude this story and see what is best for you.

Finally, should you buy or rent in Newark?

The final answer is… it depends. While looking purely at the numbers it is obvious that it’s more beneficial to rent than to buy. However, if you want to make Newark your permanent home, you should definitely go with the buying option. But, since there are other factors that have to be taken into account it’s not simple to decide whether you should buy or rent in Newark. You just have to look at your life and all of its aspects to find the right solution. Also, if you are a foreigner it wouldn’t hurt to get familiar with the tips for successful buying or renting a home because this type of information is always useful.