My Place or Yours? Rent vs. Buying in Newport, RI

By  |  0 Comments

Is 2015 your year to own?

With (believe it or not) one of the lowest tax rates on residential property in the state, Newport is usually overlooked when it comes to purchasing a home.   For those in the service industry, the idea of actually owning a home in America’s First Resort seems like a pipe dream, but is that really the case?  Could you actually be paying more out in rent than a mortgage?  Could that daily drive over the bridges be a thing of the past?  Well, the answer might surprise you.

narr ave condo

According to city-data.com, the median rent for a 2 bedroom in Newport is $1130.  Currently, there are a number of 2 bedroom condos under the $250,000 price range, with an average listing price of $221,400.  With 5% down, you could be paying $1230 a month and actually owning your own digs in town. ..and having something to show for what you’re paying for, rather than just paying your current landlord’s mortgage.   Also, once you add in some amazing tax credits offered in Rhode Island for first time home buyers, you actually make out significantly better financially than you would renting.  This is especially beneficial to my server and bartender friends that are used to paying out thousands at the end of the tax year.  Imagine the possibility of actually breaking even?  The FirstHomes tax credit is good for the life of the mortgage, up to $2000 a year off your federal tax liability.  It’s like getting two monthly payments back…every year.

Not planning to stay in Newport for the rest of your life?  Not a problem.  With home sales trending to exceed those before the crash of 2007 by next year (Freddie Mac) and home prices continuing to increase an average of 4% year over year, selling a condo in the future (or renting it out) is always going to be a good investment.  According to The New York Times, home ownership is the single best way to build wealth.  You work hard for your money on the island…make it work for you!  Of course, all of this is dependent on you being able to show your full income, which means you should be declaring 100% of your tips…which is a whole other article.  The next round of Fireball shots for the bar could be your difference between renting or owning!

-Justin Ferland, Blast Real Estate Correspondent

Justin is currently an associate with RE/MAX Advantage Group, working in both residential and commercial sales throughout Rhode Island. Feel free to contact him with any questions or assistance through his website, JustinFerland.com or (401)441-9401.