Rent or Buy? What Potential Tenants are Thinking

The choice between buying a home and renting one is among the biggest financial decisions that many adults make and those in the commercial real estate business need to be aware of the thought process. The costs of buying are more varied and complicated than for renting, making it hard for people to tell which is a better deal.

A tool worth checking out is the NY Times Rent vs. Buy Calculator that enables prospective buyers and renters to analyze their own decision. For example, for a typical person considering the purchase of a $500,000 house who expects to live there seven years, it might make more sense to rent if a similar place is available for $1,956 a month or less. Play around with it yourself the next time you're setting rents or just want to get in the mindset of a prospective tenant.