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To Rent or to Buy, That Is the Question

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You get all kinds of advice, right? If you're renting, people tell you that you're throwing your money away. If you're buying, people tell you that you don't know what you're in for. So let's take some of the pressure off and have a little fun with this. We'll take a look at two properties in the neighborhood called SOS (South of South), Southwest Center City or Graduate Hospital, depending. It's pretty, relatively safe, and has an active civic association and engaged community of neighbors.


For sale: 1631 Kater Street
Size: 3 bedrooms plus office; 2 full and 2 half-baths; 2,485 square feet
Parking: Garage
Extras: Fireplace, two decks, patio
Price: $600,000
This is a pricey house, but what you get is pretty phenomenal for the neighborhood. Great for someone planning a family or for people who have kids. The street is small and quiet even though you're within walking distance to plenty of action.


For rent: 720-722 Hicks St.
Size: 2 bedrooms, 1.5 baths, 3,000 square feet
Parking: street
Extras: Fireplace, second-floor Juliet balcony, roof deck
Price: $2,450 per month
This is a unique carriage house, and while somewhat expensive for a two-bedroom rental, the square footage is excellent and the open floorplan/loft design will make it feel even more spacious—the ceilings are 22 feet high. The street is small and quiet. So what do you do? Let's compare a few basic things.

Higher square footage: Hicks
Nicer street: Kater
Better parking: Kater
Lower maintenance costs: Hicks
More unique appearance: Hicks
Better division of space for family: Kater

In terms of which is a better investment, well, we like the New York Times' rent vs. buy interactive tool. We entered in the numbers based on a 10 percent down payment on the home, a 30-year mortgage rate of 4 percent and a somewhat hazy property tax percentage for the home based on 2012. We also accounted for a 3 percent rental price increase per year and a 2 percent home-value increase per year. You know, just for funsies. The tool allows you to shift variables with sliders and watch the graph change to indicate which is the best deal. Given the info we put in, for the first five years, renting was a better deal. But after that, buying was better. (Does anyone rent for 30 years? Not likely.)

What about you, dear readers? Which is the better deal between the two properties? We couldn't possibly factor everything in, so please add your two cents in the comments!