MADISON, Wis. - New numbers show Wisconsin is one of the few states where it's better for you to rent a home this year than buy one.
Apartment Guide shows Wisconsin as one of just 10 states where it's better to rent than buy, and we learned that holds true for the Madison metro as well.
Mark Farnan is a financial expert with Retirement Incoming Planning LLC.
"Renting has become very viable in Madison because anywhere you drive in Madison there are all kinds of new apartments going up," Farnan explained. "East Washington has been transformed in the downtown area by all these great big apartment buildings, and it's brought nightlife and restaurants and coffee bars."
According to the report, rents have gone down 1.62 percent in Wisconsin since last year, while housing prices have gone up by 6.14 percent.
It's not just millennials taking advantage. Farnan says many retired folks or those close to retiring find the flexibility more convenient and less stressful. He adds that 3 to 5 years is still the amount of time you should be willing to stay in a home after purchasing it to break even.
"Renting can be a very, very sound financial situation," Farnan said.
If you're looking at renting and are worried about saving money over time, don’t be. Even though you lose the opportunity of building equity with renting, you avoid paying for things like taxes and insurance and leave maintenance and up-keep to someone else.
Farnan stresses that you just have to be smart about your situation and dig deeper into the cost of buying a home verses that of renting.
"If you save the difference, you can actually acquire over time the same amount of equity, if you will, that you would by renting that you otherwise would in a house," he said. "You can save the difference and make up for the equity that's lost."
Farnan says one of the things to watch in the months and years to come is the fact that investors are buying up more and more starter homes that many families are looking at and driving up rates before renting them out. This could play an even bigger impact on those looking to buy than it ever has before.
We hope to keep this conversation going about prices in Madison. News 3 Now wants to know what kind of affordability questions you have, or what you're experiencing. Let Josh Spreiter know by emailing him or reaching out to him on his Facebook page.
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