There are many difficult choices to make when deciding whether to rent or buy a home, but one of the most important factors is also among the easiest to determine: How long do you plan on staying in the home or neighborhood under consideration?

It has long been a rule of thumb that if you plan on staying in a home “long-term,” then you should buy instead of rent. But how long is “long-term,” really? Just how long does it take to recoup the upfront costs of buying, or to realize the savings inherent in a mortgage payment instead of a rent payment?

In some places, the answer is as short as one year – or as long as 20 years.

Zillow’s breakeven horizon incorporates all possible costs associated with buying and renting, including upfront payments, closing costs, anticipated monthly rent and mortgage payments, insurance, taxes, utilities and maintenance costs. It helps renters or prospective buyers determine the point, in years, at which buying a home becomes more financially advantageous than renting the same home. Because neighborhood selection is such a critical part of the home shopping process, the breakeven horizon is now available at the ZIP code and neighborhood level within individual cities and towns, and can often vary widely from neighborhood to neighborhood.

Maybe you’re trying to decide whether to buy or rent in New York City. The breakeven horizon for New York City as a whole is 6.1 years. But at the neighborhood level, the breakeven horizon ranges from a low of 2.5 years in the Parkchester neighborhood in the Bronx, to a high of 11.9 years in the Carnegie Hill section of Manhattan.

Nationwide, the neighborhood with the lowest breakeven horizon is the Shelby Forest-Frayser neighborhood in Memphis, Tenn., at just one year. The neighborhood with the longest breakeven horizon is the Sandbridge area of Virginia Beach, Va., at 20.3 years.

So, if you’re thinking of moving to the Shelby Forest-Frayser part of Memphis in the next few months, and you think you’ll be there for at least a year, you should consider buying a place there instead of signing that one-year lease. And if you’re looking to find that perfect place in beautiful Sandbridge, well, you should feel comfortable signing that multi-year lease, or get ready to live there at least 20 years if you want to break even.

5 neighborhoods with shortest breakeven:

5 neighborhoods with longest breakeven:

http://www.zillowblog.com/2013-05-16