5 Reasons Homeownership Trumps Renting
The seemingly endless run of bad housing news is discouraging some potential home buyers from considering a purchase. But the truth is that the advantages of homeownership have very little to do with investment gains. The best things about owning a home have a lot more to do with personal comfort and satisfaction.
Here are five of them:
· Be your own landlord. The bank can only kick you out if you don’t pay; a landlord can be much less dependable – deciding to sell the property or choosing to live there themselves.
· Paying the principal is forced savings. Yes, it’s possible that home prices will fall further. It is also possible that your 401(k) will lose value. But over the long haul, both are likely to enjoy modest gains in value.
· Fixed-rate mortgages never rise – and eventually you pay them off. With mortgage rates at record lows, people who buy now are locking in real bargains.
· Good schools. Family-sized rentals are harder to come by in areas with excellent public schools.
· Spacious properties in pleasant neighborhoods. Sizable homes in attractive communities are almost always owned – not rented.
Source: The New York Times, Ron Lieber (08/27/2010)
Front Gate Properties, We’re selling the BEST Real Estate in Aiken, SC.
Renting Unsold Property May Be a Good Move
Home owners who can’t or don’t want to sell their homes in today’s market but must move should consider renting out the property.
Obtaining a professional property manager is a good first step. Professional property managers charge 7 percent to 10 percent of the monthly rent in many areas. Two associations whose members manage small residential properties are National Association of Residential Property Managers and Institute of Real Estate Management.
Current rents may not be high enough to cover carrying charges, including mortgage, taxes, and insurance. Nevertheless, renting out the property may still make sense if property values rise in the next few years.
Offering a 12-month lease that converts to month-to-month is a good idea, if the owners are considering selling eventually. Include language in the lease that allows a real estate professional to show the home to potential buyers with 24 hours’ notice to tenants.
Source: Money Magazine, Amanda Gengler (07/28/2010)
Front Gate Properties, We’re selling the BEST Real Estate in Aiken, SC.
Why Rent When Buying is Cheaper?
The foreclosure crisis has knocked down prices so much in some parts of the country that it’s cheaper or only slightly more expensive to own than it is to rent.
BusinessWeek, with help from research firm Reis, calculated ownership costs assuming a fixed-rate, 30-year mortgage for 100 percent of the purchase price with no down payment. The magazine said that had they factored in a 20 percent down payment – what most people must make these days – owning would have been cheaper than renting in most metros.
“It’s a great time to buy,” says Mollie Carmichael, senior vice-president of John Burns Real Estate Consulting in Irvine, Calif. “If you can own a home for less than the cost to rent, then it’s a logical financial proposition.” Full Story..
Front Gate Properties, We’re selling the BEST Real Estate in Aiken, SC.
1918 Cottage
Renovated and fully furnished 2 bedroom 1bath cottage within walking distance of downtown Aiken. Super cute with a picket fenced front yard, cathedral ceilings, hardwood and tile floors, Tiffany lighting, custom shower and privacy fenced backyard. Available for short and long term rentals. For more information about this rental property please contact Nancy Johnson at 803-335-8740.
Front Gate Properties, We’re selling the BEST Real Estate in Aiken, SC.