Read Our Blog Visit Green Living

HHHunt Rent vs Buy Blog

RSS -- Grab HHHunt RSS Feed

Signs You May Not Be Ready to Buy a Home

08 Aug 2018

Posted by Joseph Coupal

HHHiunt Apartment

Buying a home can be a good investment. It can be a rewarding experience for you and your family.

But the fact is, it isn't right in every situation and it only works if the buyer is financially prepared. As we saw during the housing crisis, buying a house when you aren't ready can lead to disastrous results.

How can you tell if you're ready? The experts at real estate marketplace Trulia suggest asking yourself some questions.

The first has to do with income. Does your household earn enough money to make the monthly payment on a home, pay for insurance, pay the taxes, and cover maintenance and repairs?

When you rent your home, all of those costs are baked into the monthly rent. If the water heater goes bad, that's the landlord's problem, not yours.

It's true that, with low interest rates, a mortgage might be the same, or even less than rent in some markets. But you can't overlook the other costs of owning a home.

Debt-to-income ratio

What about your debt? If you have outstanding student loans and rising credit card balances, you might not be ready to take on a mortgage. In fact, that could be one thing that might disqualify you.

Lenders look at a borrower's debt-to-income ratio. If the ratio is too high, it reduces the amount you can borrow. In most cases, a lender will want your debt to be no more than 36% of gross income.

When looking at your savings, don't just think about how much you need for a down payment. If the down payment takes all your ready cash, you'll have nothing left to cover those expenses that almost always crop up in the first year of home ownership.

Two important factors

Before considering a home purchase, you also need to make sure you will qualify for a mortgage. Two factors could keep that from happening.

First, you need to have been on the job, or employed in the same industry, for at least two years. Lenders want to see that employment consistency before they'll consider funding your home purchase.

Second, you need a reasonably good credit score. While it is true you might qualify for a subprime mortgage with a marginal credit score, there could be some real disadvantages to being lumped into the subprime sector.

Having a better credit score -- 720 or better -- will get you a better interest rate, in most cases. So it might be wise to spend some time trying to raise your credit score before considering a home purchase, and the easiest way to get started on that is to simply pay all of your bills on time.

Finally, give some thought to the future. If you purchase a home, you'll need to live in it for a while before you can sell it without losing money. The experts at Trulia suggest three to five years is the minimum length of time you'll need to live in it before selling.

If you think there's a good chance you'll be relocating in a couple of years, the prudent thing to do is keep renting.

For more information, contact HHHunt.

Source: consumeraffairs.com

Why it Makes More Sense to Rent than Buy

11 Jun 2018

Posted by Joseph Coupal

HHHunt Apartments

Nearly two-thirds of Americans live in areas where it is more affordable to rent than buy.

A majority of Americans are renting on the cheap — at least, compared to what they’d be paying if they bought a home.

Most Americans (64%) live in a county where renting takes up a smaller portion of one’s paycheck than buying, according to a recent report released by real estate data firm Attom Data Solutions. And yet in more than half (54%) of housing markets — 240 of 447 U.S. counties — buying a median-price home is actually more affordable than renting a three-bedroom property.

So why the seeming contradiction? Even if they can’t afford to buy, the majority of people are renting in areas where they get the most bang for their buck. The buy-versus-rent calculus is shifting toward renting being more affordable. With a strong jobs market they want to stay mobile and often can’t afford to buy near urban centers where they’re more likely to get a job and a job at higher wages.

Renting may be better than owning to build wealth — if you’re disciplined to invest the money you save by not owning a propertys. When considering buying and building wealth through equity appreciation versus renting, and reinvesting in a portfolio of stocks and bonds, property appreciation does not change the results.

What’s contributing to this shift toward renting?

Interest rates are expected to increase throughout 2018, making buying a home with a mortgage less affordable for many — even younger Americans who aim to pay off their home in 20 or 30 years and reap the appreciation of a rise in home values. And tight housing inventory across the country is fueling competition for homes that makes them more expensive.

Plus, the “drive until you afford” mentality has made many once-affordable suburbs and exurbs vastly more expensive. Large swaths of the New Jersey and New York commuting belt have seen double-digit house price increases over the last 12 months, for instance. In fact, single-family rental is the fastest-growing segment of the housing market.

The tax bill has further complicated the math in deciding whether to rent or buy. Under the 2017 tax code, a family of three with an annual income of $150,000 would be better off buying if their rent exceeded $1,507 per month. But with the new tax code, they’d have to pay more than $1,885 per month to make buying worthwhile.

More renters may also find themselves priced out of the housing market, because home prices are appreciating more quickly than rents in 59% of markets.

What’s more, in 60% of markets rents are rising faster than wages. As a result, more renters may also find themselves priced out of the housing market, because home prices are appreciating more quickly than rents in 59% of markets. And the old adage of not spending more than 30% of your income on rent (or a mortgage) is increasingly difficult in cities like San Francisco and New York.

For more information contact HHHunt.

Source: marketwatch.com

Guide to Downsizing

01 Jun 2018

Posted by Joseph Coupal

Abberly Waterstone Apartments, Stafford, VAWhen it comes time to consider downsizing your home, there are a mix of emotions and stressors you may have never encountered before. For seniors, it’s a situation that sometimes comes about out of necessity and sometimes simply as a way of improving the quality of retirement years.

As the number of Baby Boomers entering retirement continues to climb in the US, the reasons to start downsizing are more apparent than ever:

  • Economic necessity. It’s common for many older adults to be faced with unexpected medical expenses, growing homeowners insurance rates, and rising utility costs. Selling the house and moving into a more affordable space is often the solution.
  • Convenience. If you’re tired of doing all the housework that comes with a larger home, you’re not alone. A lot of retirees opt for smaller homes where upkeep is less of a responsibility.

In terms of the cost benefits, retired seniors stand to save significantly when moving to a smaller space. Consider that for the typical single-family home, heating and cooling accounts for 42% of the energy bill. When the square footage of your home shrinks, so does that energy bill.

Moving to a smaller home could also help you save on:

  • Mortgage payments
  • Property taxes
  • Maintenance (lawn, pest control, snow removal)

If you’re preparing for retirement or have already retired and you’re now considering downsizing, know that you’re in good company. A recent poll concludes that 37% of Baby Boomers plan to move later in life. Of those planning to move again after retirement, 47% said they’d like to downsize.

Choosing to downsize to an apartment in Stafford, VA in retirement isn’t always motivated by economics, but it is always affected by it. Even for retirees belonging to a high tax bracket, downsizing is a consideration for practical reasons.

Finding a place to live

Would you prefer to stay in the same area or are you excited about moving to a new place? If you’re moving somewhere new, take into consideration all the amenities you’ll need now and later on. Check for proximity to hospitals, grocery stores, and other essentials. Downsizing should make life easier—if you have to travel 45 mins to weekly doctor appointments, think about how that will affect your quality of life.

No matter the reason you have for considering downsizing, you are wise to contemplate its advantages. Not only do you have the opportunity to start anew, perhaps in closer proximity to family, but you can drastically improve your quality of life in retirement. By downsizing to a smaller home, you are freed from the upkeep responsibilities of owning a large home. You’ll potentially save big on standard costs associated with homeownership and most importantly of all, you can finally take time to relax.

For more information contact HHHunt.

#HowYouLive

bankrate.com

Should I Rent or Own My Home?

24 May 2018

Posted by Joseph Coupal

HHHunt Apartment HomesWith 10 months left on a 2-year lease, my husband and I are tripping over ourselves in the rent vs. buy dance.

Buying seems like the next most logical life step for two gainfully employed recently wed 30-somethings. With a mortgage we’d pay less for more space and have something to call our own. We’d finally feel settled, build up equity and do typical HGTV things like renovate bathrooms over and over again.

But at what cost?

For us, buying would most likely mean moving further outside the city, adding an undesirable commute and a tax on our most valuable asset: time. It would mean dropping hefty sums of money on unexpected expenses for things I’ve always taken for granted in my rentals like roofs and air conditioners and carpet. It would mean tying ourselves to a multi-hundred-thousand dollar anchor.

Most people will try to talk you out of renting with a logical financial argument in favor of buying. They’re not wrong. It just makes mathematical sense that in most major American metros, buying is cheaper than renting in the long run.

And then there’s the social pressure. Once I was trying to convince a friend to sell her place, move closer to the city and rent an apartment like mine since the commute was wearing on her. Her response was that she didn’t want to “go backwards” in life. It had never occurred to me that I was behind because I didn’t own a house.

For me, financing a suburban American dream I don’t want to live doesn’t make sense. Where most look at homeownership as a step in the right direction towards personal and financial success, I see it as a big expensive burden that moves me deeper into debt (albeit a strategic investment) and further away from my desired urban, unrooted, minimalist lifestyle. That’s hard to maintain as a first-time homebuyer.

So we decided we’re not in a rush to buy.

I’m sure home buying will be for us eventually, but for now we’re content to save up some more cash and relish the often overlooked finer things of the renter’s life.

Renters don’t have to fix even the simplest things that break — Our door lock busted the other day. I called our landlord and he had a locksmith there to fix it (on his dime) pronto. Could I change out a lock? Yes. Would I rather someone else do it? Yes.

The biggest renovation decision a renter has to make is what color paint to use.

Renters don’t have to buy or replace expensive basic life necessities — I’d be content to go my entire life never ever paying money for a toilet.

The bank doesn’t have your life by the throat for 30 years — Home buying is smart debt if you do it right but debt makes me queasy regardless. I save up and pay cash for my big purchases. I worked three jobs in grad school to avoid taking out loans. And if I could rummage it up, I’d pay cash for a house. (Might have to be a tiny house though.)

Renters don’t cut the grass — This, of course, depends on your housing situation, but if you’re in an apartment without a lawn or a house rental with built-in HOA maintenance, you’re lawn mower free, my friend.

You can pick up and leave whenever you want — This is the big one for me. If I land in a place I don’t love, I like knowing I’m out at the end of the lease. I also like knowing I could leave the city all together. I’ve been in Charlotte for 6 years. My family is here. My business is here. I should have bought a house a long time ago. I’m not going anywhere. But I like knowing I could go anywhere if I really wanted to. That freedom, I think, is the best part of being a renter.

For more information on apartments, contact HHHunt.

#HowYouLive

charlotteagenda.com

Homeownership Hidden Costs Often Top $9K a Year

01 May 2018

Posted by Joseph Coupal

HHHunt Apartments

Prepare yourself by knowing the less-obvious costs of owning a home. Insurance, maintenance and more add up faster than you think.

Buyers too often focus on a home’s list price or mortgage payment to determine what they can afford. However, the numerous less-obvious costs associated with homeownership can affect the monthly bottom line.

To help home buyers budget more accurately, Zillow and Thumbtack identified several common but often overlooked home expenses and calculated what homeowners around the country could expect to pay for them. The analysis also included utility cost estimates.

While each extra expense might seem small, they cost U.S. homeowners, on average, $9,080 a year, according to the report.

Unavoidable costs

Nationally, homeowners pay an average of $6,059 a year in unavoidable costs, which include homeowners insurance, property taxes and utilities. Since nearly half (47 percent) of home shoppers today are first-time buyers, many of these extra costs may come as a surprise.

Maintenance expenses

Nearly all homeowners (96 percent) have made some kind of improvement to their homes. While many complete these projects themselves, those who pay professionals can expect to spend an average of $3,021 for the six most common hired home projects: carpet cleaning, yard work, gutter cleaning, HVAC maintenance, house cleaning and pressure washing.

Budget planning

More than a third of buyers go over budget on a home purchase. In addition to the mortgage, the price includes estimated property taxes, insurance, PMI, utilities, taxes, HOA fees and closing costs.

For more information on apartments, contact HHHunt.

Source: zillow.com

Should You Downsize in Retirement

03 Apr 2018

Posted by Joseph Coupal

HHHunt Apartments

One method for freeing home equity for other uses is to downsize your home as a part of moving. Downsizing could mean either moving to a smaller home, or moving into a similar-sized home in a less expensive community.

The arithmetic is fairly basic. If you’ve paid off your mortgage and live in a $300,000 home, and then sell it and move into a $200,000 home, then $100,000 of your home equity has been freed for other uses.

Another possibility is simply to sell your home and then rent. Renting frees up home equity and provides more optionality and flexibility to make more frequent moves before settling down.

When analyzing the decision to rent or buy, you’ll need to consider factors such as the loss of build-up in home equity and its subsequent growth (or loss) and savings on property taxes and other types of home maintenance.

As a part of downsizing, you could consider moving to an apartment community which may be less expensive because of the amenities offered and provide organized activities and social support.

For more information, contact HHHunt.

Source: Excerpts - Forbes

Why Renting is Better than Buying

13 Mar 2018

Posted by Joseph Coupal

Buy or Rent

Both renting and buying have their own sets of financial advantages. There are tremendous financial benefits to renting as opposed to buying a house of your own. Here is a look at some reasons why renters have the better financial deal over homeowners.

No Maintenance Costs or Repair Bills

A definite advantage that renters have is that they have no maintenance costs or repair bills to pay off. When you rent, your landlord is responsible for all maintenance and repair costs. If an appliance stops working or your roof starts to leak, you do not have any financial responsibility to have these things fixed.

Access to Amenities

Another financial benefit to renting over buying a house of your own is having access to amenities that would otherwise be a huge expense. Luxuries such as an in-ground pool or a fitness center come standard at many midscale to upscale apartment complexes with no additional charge to tenants.

No Real Estate Taxes

An obvious benefit that renters have over homeowners is that they do not have to pay real estate taxes. Real estate taxes can be a hefty burden for homeowners.

No Big Down Payment

Another area where renters have the better financial deal is upon signing. You do not have to have a huge down payment saved up to move into a rental property. While the exact amount you need to move in varies from case to case, the total amount is significantly less than you would need to buy a house.

Decreasing Property Value

Property values go up and down, and while this may affect homeowners in a big way, it does not affect renters. Home value determines the amount of property taxes you pay, the amount of your mortgage and more. In a rocky housing market, renters are not as adversely affected.

Flexibility to Downsize

In today's economy, many people struggle to make ends meet. By renting, you have the option to downgrade into a more affordable living space at the end of the lease. When you are a homeowner, it is much more difficult to break free of an expensive house because of the fees involved with buying and selling a home.

Fixed Rent Amount

Rent amounts are fixed for the span of the lease agreement. This means you are able to budget more efficiently since you know the amount of rent you are required to pay. Mortgages and the amount of the property tax can fluctuate.

Lower Insurance Costs

While homeowners need to maintain a homeowner's insurance policy, renters would be wise to invest in a renter's insurance policy. Luckily for renters, renter's insurance is much cheaper and it covers quite a lot. The average cost of renter's insurance is just $12 per month.

Lower Utility Costs

It is much more affordable to heat and power an apartment or small rental home as opposed to a larger home. Rentals typically have a more compact floor plan, and renters can expect lower utility costs.

The Bottom Line

While owning a home may be beneficial over a long period of time, for many people renting is the better option. There are plenty of examples that show how renting can save consumers a considerable amount of money. The choice of whether to rent or buy is a personal one. Before making a hasty move, make the financial decision that is right for you and your family.

For more information on apartments contact HHHunt.

Source: Investopedia.com

Renting Looks Better Because Housing Prices are So High

06 Mar 2018

Posted by Joseph Coupal

HHHunt Apartments

Millennials locked out of the housing market have this consolation: House prices have shot up so quickly that the financial advantage of being a homeowner is fast eroding in many cities.

While it’s still a better deal to buy in some cities, the economic benefit has narrowed to the point that in some places, for some households, the decision to rent or buy a home may be too close to call.

The shift has come because home prices and interest rates have risen recently, while rents have largely stagnated.

To be sure, owning remains at least a bit cheaper than renting in all 100 of the major cities on Trulia’s list.

Yet that difference has narrowed sharply from last year, when owners were paying roughly 41% less than renters. Add in that many apartment communities have additional amenities that you would pay for if you owned a home as well as eliminating the time spent on home maintenance.

In some popular cities, moreover, the homeowner advantage is close to being erased.

And it wouldn’t take that much to erase those homeowner price advantages altogether, the Trulia data shows. Even a 22% difference could be eliminated if home prices continue to outpace rents — or if interest rates rise.

For instance, Trulia’s calculations are based on a 30-year mortgage rate of 4.1%. If rates climbed 2.7 percentage points to 6.8%, the current homeowner advantage in many cities would disappear completely.

That’s not necessarily an outlandish scenario. While mortgage rates have remained low since the 2008 financial crisis, rates around 7% are much closer to the historical norm. Federal Reserve officials, whose control of short-term interest rates gives them some sway over mortgage prices, expect those short-term rates to rise roughly two to three percentage points over the next few years.

Trulia’s rent vs. buy calculations are based on median homes value and rental prices for April 2017. Trulia also assumed homeowners took out a 30-year mortgage covering 80% of a property’s value and lived in the property for seven years.

That seven-year assumption is key, because there is one scenario where it’s often cheaper to rent than buy: when you plan to stay in a home for just a couple of years.

In that case, one-time costs like the real estate agent’s commission and closing costs loom larger — and you benefit less from your home’s appreciation.

For more information on apartments contact HHHunt.

Source: Time- Money

Owning a Home can be a Challenge

28 Feb 2018

Posted by Joseph Coupal

HHHunt Apartments

In their pursuit to find the perfect house, many renters have been surprised by how many homeowners have tried to deter them from taking the real estate plunge.

It’s no secret that owning property can be a great investment but, apparently, it can also be a challenge.

Here are 5 of the top reasons to remain a renter:

1) Hidden costs: Forking over cash for everything from property taxes, to a new boiler, to a lawn care can really add up. As a renter, you know exactly what that roof over your head will set you back each month, and no broken pipes are going to eat into your entertainment budget.

2) Tax letdown: Those alleged tax advantages don't quite exist anymore. Fluctuating property taxes and the fact that you cannot deduct a loss on the sale of your home give some serious pause.

3) Stunted social life: The average homeowner tends to spend less time on active leisure or with friends, experiences more negative feelings during time spent with friends, derives less joy from love and relationships and is also less likely to enjoy being with people.

4) All tied down: Although you may have lived in the same apartment for more than a decade, it is nice to know you can move your family to Paris with little hassle, should the opportunity arise.

5) The big debt: This ties in with #4 above. Although it has a marginally nicer name, having a mortgage is having a debt. Unless you have a lot of cash to burn, investing in a home puts you in the hole.

There are many good reasons to buy property. Topping the list is the desire to leave something substantial to children. However, being mindful of the disadvantages can help prevent you from rushing into an imperfect place.

For more information on renting, contact HHHunt .

Source: SudburyPatch.com

When Renting is the Right Decision

06 Nov 2017

Posted by Joseph Coupal

HHHunt ApartmentsConventional wisdom suggests buying a home makes more financial sense than renting. In many cases, this is true. However, renting is sometimes a smarter approach than buying.

As with any financial decision, all of the options and circumstances need to be weighed before jumping in. Making a major purchase requires doing some homework. The following are some reasons why renting can be more beneficial than buying.

Youth

The typical first-time home buyer is 31-years-old. People who are younger than that and uncertain about their futures should not feel pressured into buying simply because it is presumed to be the “adult” thing to do. Renting and feeling your financial way, which can include seeing how a job pans out or where one’s budget lies after paying off debts, might make more financial sense than buying.

High price-to-rent ratio

Buying may seem like a wise idea, but it could be causing people to spend more than necessary, particularly if they check the price-to-rent ratio and find homes in their area are not fairly priced.

Figuring a P/R ratio includes finding two similar houses (or condos or apartments) where one is for sale and the other is for rent. Divide the sale price of the first place by the annual rent for the second. The end result is the P/R ratio.

The higher the P/R ratio, the more sense it makes to rent instead of buy.

Home prices continue to rise

Some people find themselves being priced out of certain neighborhoods or cities. While the typical worker’s earnings increased a meager 0.3 percent during the study period, median house prices were up by 17 percent. Wages have not recovered from the Great Recession as quickly as home prices have, and some people may need to rent out of necessity.

A market shortage makes it harder to find an affordable home. The number of homes available for sale in many areas of the country has fallen below the number that is required for the market to be in balance. Therefore, even when a home becomes available, demand drives the price up to where it may not be affordable or fiscally smart to purchase. In such instances, renting may be the best option.

One doesn’t meet the buying criteria

Individuals should not buy a home based on market conditions or pressure from others. Instead, they should buy when they’re financially ready. This means being out of debt; having between three and six months of expenses in an emergency fund; enough cash for a 10 to 20 percent down payment on a fixed mortgage; and when their mortgage payment will be no more than 25 percent of their monthly take-home pay.

Renting can be a smart move in many instances. Only when individuals are financially and emotionally ready to buy should they begin searching for their first homes.

For more information on apartments, contact HHHunt.

#HowYouLive

villagenews.com


Get e-mail notifications of new blog posts!
Enter email address below:


Delivered by FeedBurner