Read Our Blog Visit Green Living

HHHunt Rent vs Buy Blog

RSS -- Grab HHHunt RSS Feed

Millennials Aren't The Only Ones Renting Apartments

14 Aug 2018

Posted by Joseph Coupal

HHHunt Apartments

Renters are getting a little older these days.

Rental applicants tend to conjure up images of recent college grads looking to start their life in the real world. But Millennials are being joined as renters by people who have already spent decades in adulthood, and may have better credit and higher income.

Since 2005, there has been an uptick in renters, with people in their 50s and 60s making up the largest chunk of the increase.

In fact, the majority of all renters are currently 40 or older.

There are many reasons that the renter population includes a growing number of Gen-Xers and Baby Boomers.

The 2008 housing collapse that led to a wave of foreclosures has turned some people off to homeownership. The tight credit market can also hinder renters from securing a home loan.

Plus, not everyone wants to be a homeowner in their golden years, and the decision to trade a mortgage for a lease is about a new lifestyle, especially for empty-nesters.

Seniors are leaving their homes and renting in a much more urban-type settings from the suburbs to be part of the activities and be mixed in with people of all ages. It gives them something to do if the kids are gone, or their spouses.

The amenities that come in new rental buildings and their units are appealing to older renters. They have everything they need in their building.

Renting also gets rid of the responsibilities that come with home ownership, which can become burdensome as owners age.

It's about portability. They want to travel and don't want to be burdened by house payments and expenses and upkeep.

Some older homeowners are also cashing in on the recent rise in home prices.

They want to take advantage of getting equity out of their home now, and not wait until they actually retire to move into the city and get a cool apartment.

For more information on apartments, contact HHHunt.

Source: CNN Money

Buying or Renting: 3 Myths To Consider

25 Jul 2018

Posted by Joseph Coupal

HHHunt ApartmentsIs it time to move? Should I continue renting? Should I be house or condo hunting? If you’re starting to ask yourself these questions, you’re also likely turning to friends and family for advice, too. Before you’re swayed one way or the other, consider these three myths often thrown into the buying or renting debate.

Myth #1: You should buy in a buyer’s market.

Buyers beware. Never purchase a home based solely on the market. Just because the market looks good, does not mean it’s good for you. Your first step should be identifying where you stand financially. Determine how much you can safely afford to spend each month on housing or you may be at risk of living beyond your means.

Myth #2: If you own a home, you’ll benefit from the tax breaks.

This is not always the case. While the interest and tax property portions of your mortgage payment may be tax deductible, home improvements, home insurance and losses on the sale of a home are not and never have been tax deductible.

With the recent tax law changes, when it comes to purchasing a home, interest on only the first $750,000 of your mortgage will be deductible. And keep in mind that many states do allow renters to deduct a portion of their rent from their state taxes.

Myth #3: You’re throwing money down the drain by renting.

While this can certainly be a tempting way to think, it is not necessarily true. By choosing to rent, you are satisfying your need for shelter. You have a roof over your head, but unlike purchasing a house or condo, you’re not responsible for the day-to-day upkeep.

When renting, you also benefit from flexibility. You can change apartments much more quickly than you can sell your home, and the money you may have been putting towards mortgage payments is free to be funneled into other investment opportunities.

To help guide your decision, here are some things to consider (both good and bad) about buying or renting:

Rent:

  • Not paying for your own mortgage
  • Not responsible for major upkeep
  • Subject to landlord rules (i.e. pets, smoking, painting, parking)
  • Flexibility in terms of moving
  • Up-front Costs: Security deposit, First and Last

Buy:

  • Building equity
  • Responsible for all upkeep
  • Your rules go
  • Pets welcome
  • May lose value
  • Up-front Costs: Large down payment, cash to cover closing costs, moving expenses, emergency fund
  • Best to stay put for at least seven years

Choosing whether to purchase a home or continue renting ultimately comes down to your financial standing and personal preference. What may be right for your neighbor may not be right for you. That said, be sure to make an educated decision and don’t be fooled by some of the myths around this ongoing topic!

For more information on apartments, contact HHHunt.

#HowYouLive

plymouthrock.com

Homeownership in Retirement can be a Dangerous Prospect

17 Jul 2018

Posted by Joseph Coupal

HHHunt ApartmentsDespite the benefits of homeownership, there's one huge drawback to owning property in retirement, and it's committing yourself to a variable expense while living on a fixed income. Even if your mortgage itself is paid off by the time you enter retirement, you'll still have property taxes to contend with. And those have a tendency to rise over time, even during periods when home values don't follow suit.

There's also maintenance and repairs to think about, and that's where a lot of retirees who own homes get into trouble. The average homeowner spends 1% to 4% of his or her home's value on standard annual upkeep. Now being a retiree doesn't automatically mean you'll own an aging home. But if yours is on the older side, you should plan on hitting the top end of that range, which could really eat into your limited budget.

Furthermore, while that 1% to 4% range applies to regular maintenance, it doesn't include major repairs that could spring up on you without notice. I'm talking about things like your heating system going kaput or a pipe bursting in your basement -- expenses that could really hurt you financially when your income doesn't allow for too many surprises.

And there lies the danger of owning a home in retirement: You just don't know what to expect. And while renting certainly isn't without risk -- you could see your rent go up from year to year or find yourself suddenly on the hunt for a new home when your landlord unexpectedly decides to sell -- when you rent, you lock yourself into a fixed cost for the duration of your lease. Sign a series of long-term, affordable leases, and you eliminate much of the worry that comes with owning.

Ultimately, the decision to own a home during retirement boils down to how much risk you're willing to take on. If you love your home, adore your neighborhood, and don't want to deal with the hassle and uncertainly of renting, then by all means, stay in your home. Just make sure you have a decent chunk of savings -- both emergency and otherwise -- to protect yourself from the various unknowns involved.

For more information on apartments, contact HHHunt.

#HowYouLive

NWI.com

Buying a Home Could be a Bad Career Move

11 Jul 2018

Posted by Joseph Coupal

HHHunt Apartments - Buy or Rent

American dream or ball and chain? We’ve heard so many times that homes are the ultimate investment, but your job advancement and long-term salary potential could be hindered if you’re tied down.

Most of the time, the buy-vs.-rent debate revolves around which is the best financial decision. That’s for good reason: As you’ve undoubtedly heard more than once, buying a home is the biggest purchase you’ll probably ever make. Most people need to borrow hundreds of thousands of dollars to make it happen.

It’s not a decision to make lightly, and the numbers involved are something you need to take seriously — especially when the adage that buying is always better than renting is a myth, not fact.

In some cases, you shouldn’t buy a home because it’s not the financially sound choice. Taking on a large amount of debt for the long term after shelling out that much cash up front could put you in a precarious financial position.

But let’s just say the numbers do check out for you, and you want to buy a home. In that case, you still need to consider one other factor that might make buying a bad choice: your career.

The Finances Check Out, But That Still Doesn’t Mean You Should Buy

At worst, buying a home could sabotage your career opportunities. Even in a less-dramatic situation, your house could seriously limit how much you could advance in your career — and affect how much money you can make.

Owning a home reduces your flexibility to pursue jobs and opportunities that may make it easier for you to build serious wealth over your lifetime.

For many people, committing to living in a single location for years could seriously interfere with their ability to grow their career, expand their business, and earn more money.

It’s Difficult to Move to Follow Career Opportunities

It’s hard enough to move from one place to another when you rent. But moving as a renter is considerably easier than moving as an owner, because you can’t just up and leave any time you want when you own your home. As a renter, you always have the ability to break your lease if you need to.

But as a homeowner, you can’t just call up the bank or anyone else and ask them to take the house off your hands.

If you’re trying to move to chase down a career opportunity, you need the ability to be fast and flexible. Depending on what the real estate market looks like at the time you want to move, that may not be possible.

You Might Not Be Able to Afford to Move

If you bought within the last three years, you sunk a lot of cash into your home. In an average market, it’s unlikely that home prices will have risen to a point where you could break even, let alone make a profit. Unless you’re willing to lose money on the house you might have bought as an “investment,” you might be in a position where you can’t afford to move.

A Lack of Career Flexibility Could Lead to a Lack of Wealth

The inability to move to explore a new position, role or career opportunity could limit your ability to earn a higher income. Taking new jobs or calculated career risks are both great ways to potentially earn more money than to sit at your existing job and cross your fingers hoping for a raise.

When you earn more money, you get to choose how much to save for the future, which puts the power in your hands rather than at the whim of the real estate (or stock) market.

Buying a Home Limits Your Flexibility

Of course, all of this is just something else to think about when you’re making a decision on whether or not to buy. You may not need much career flexibility at all, and that’s fine. But failing to account for this could turn into a big financial mistake.

You do need to understand how buying a home can limit your career flexibility. It can limit your ability to chase down an opportunity if it arose unexpectedly. It also limits your financial flexibility and liquidity over the short term, because it requires you to put a good chunk of your liquid cash into an illiquid asset.

“Less flexibility” is a trade-off you make when you buy a home. Whether that’s acceptable or not is up to you — but the bottom line is that you must think about this factor if you want to make a fully informed, responsible decision around buying real estate.

For more information, contact HHHunt.

Source: kiplinger.com

Renters Create More Wealth than Buyers

03 Jul 2018

Posted by Joseph Coupal

HHHunt ApartmentsWith housing markets around the U.S. nearing the peak in their cycles, renters who reinvest their money have an increasingly better chance at creating wealth than individuals who purchase a home, according to the latest national index.

"On the heels of information concerning slowing housing starts, rising mortgage rates, decreased demand and unsustainable price increases, these numbers provide additional evidence that housing markets around the country are slowing, resulting in many to opt for renting," said Ken Johnson, Ph.D., a real estate economist and one of the index's creators in FAU's College of Business.

Of the 23 separate metro areas, many are nearing the top of their current housing cycle, meaning they are above their long-term pricing trend.

The biggest contributor to the rising cost of ownership is rising house prices.

The current scores driving the markets in the direction of renting and reinvesting appear to be the results of higher mortgage rates, increase in returns, on average, in the stock market, and the cost of ownership, which includes your mortgage payment, taxes, insurance, maintenance, etc.

All of these costs are rising faster than the cost of renting a comparable property. Therefore, renters who take the money they're saving each month and reinvest it are going to build wealth faster than those who buy a home, on average.

For more information on apartments, contact HHHunt.

#HowYouLive

prnewswire.com

Forget Owning, Baby Boomers and Millennials are Renting

08 May 2018

Posted by Joseph Coupal

HHHunt ApartmentsRenting traditionally has been viewed as one rung on the housing ladder: First, you rent an apartment, then move on to purchase a starter home, which is followed by the family home, where most people spend the majority of their years. Renting has always been a step in the process and rarely the endgame.

Based on the growing number of renters in major cities throughout the country it’s clear that attitude is changing. Instead of viewing renting as a short-term phase, an increasing number of residents are choosing rental housing specifically because it offers a more-flexible lifestyle than homeownership.

This is especially true for baby boomers and millennials, two of the fastest-growing groups of renters. Whether just starting out in their career or settling into retirement, both generations are seeking a lifestyle that offers mobility, convenience and community.

There’s no question that apartment living keeps getting better. We’ve just started to see a slight shift in boomers actually deciding to forgo a mortgage for rent in high-end, highly serviced properties with lots of amenities, and believe that we’ll see more. And they’re not necessarily moving from the suburbs directly into downtown locations. More likely, they’re staying fairly close to home in communities they’ve known for decades and are opting for nearby town center locations. Millennials, on the other hand, are enamored by the eclectic, energetic urban environment and thus love living downtown close to art, culture and entertainment.

Mobility needed: Regardless of age, mobility is one of the top reasons people decide to rent. For millennials just entering the workforce or in the process of building their careers, the ability to relocate is a major factor. Even if they are in a financial position to purchase a home, millennials may choose to rent to have the flexibility to take advantage of new job opportunities as they arise.

Boomers value mobility, as well — with their children grown and out of the house, many have realized they no longer want or need a large suburban home. Instead, they’re opting to rent in urban environments that offer greater flexibility for travel and the option to leverage the equity in their homes. Many baby boomers also are working longer than their parents did. They still want to be close to their job and are not yet ready to retire to a new locale, but they are empty-nesters who want a vibrant, walkable lifestyle.

Transportation and accessibility play an important role. With busier-than-ever lifestyles, more and more people are simply refusing to spend hours commuting every day. Especially in cities such as Washington, where the commute between downtown and the outlying suburbs can take hours during peak travel times, rental housing close to work or with easy access to public transit offers residents the opportunity to achieve a higher quality of life, with less time stuck in traffic.

The convenience of living in the middle of things: Similarly, we’re seeing residents choose renting over homeownership for the sake of convenience. For busy boomers who are ready to give up the yard work and other home-maintenance tasks, renting is an attractive alternative. If something breaks or goes wrong, all they have to do is pick up the phone and call the property manager to take care of it. The same goes for young professionals who may lack the time, experience or willingness to address these issues.

We’re also witnessing apartment owners and operators go beyond basics like regular maintenance by offering amenities such as package storage, and fitness centers and pools to enhance the resident experience.

Creating a sense of community: In addition to making residents’ lives easier, modern apartment amenities are designed to encourage socialization. These are the types of experiences that today’s renters are looking to incorporate into their lifestyles.

This sense of community is important to boomers, who may be leaving a social network behind as they move away from the suburbs; as well as to millennials who are eager to make new connections personally and professionally, especially if they are new to the area. With shared common spaces and experiences, apartment living creates organic opportunities for residents to make these connections and build on them.

In today’s economy, we can rent almost anything we need, including music, movies, clothes and cars. Having all of these options available to us suggests that people’s view of ownership is shifting. It’s natural that this trend extends to our homes, giving people more choice over where and how they live.

For more information on apartments, contact HHHunt.

#HowYouLive

washingtonpost.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

The Rent or Buy Debate Doesn't Make Sense

20 Mar 2018

Posted by Joseph Coupal

HHHunt ApartmentsWhen you buy a home, you pay for things you don’t have to pay for as a renter: loan interest, property taxes, insurance, and even maintenance and repair costs. That’s part of the argument in favor of renting: there are so many additional costs and factors that get overlooked. That goes for both sides, though, and the details vary depending on the situation. Here are a few commonly overlooked factors that make up the specifics.

  • How long you’ll live in the home: This varies depending on the market, but in general, the longer you’re in the home, the better, because your costs are spread out over time.
  • The cost of housing in your area: In most cases, people rent because houses are just too expensive, but it all depends on the market in your area. If renting is extremely costly in your area, it might be more affordable to buy a home.
  • The opportunity cost of your taxes and insurance: What kind of long-term return could you get if you invested this money instead, in the stock market, a CD, or even a “high interest” savings account?
  • The opportunity cost of your down payment: Similarly, how much of a return could you get if you invested that lump sum instead?

It’s impossible to say renting or buying is a better decision because each one of these factors (and more) depends on your unique situation. You have to consider where you live, what kind of house you’re looking for, how much you pay in rent, how much you’ll pay in the future...the list goes on and on.

A Rent vs. Buy calculator is a great tool for simplifying these complexities, depending on your own individual specifics. Still, a calculator can only do so much. It might tell you the better long-term decision on paper, but that still doesn’t mean it’s the best decision for you.

Your Home is a Purchase, Not an Investment

Most experts agree that you shouldn’t think of your primary home as an investment. Contrary to popular belief, real estate barely outpaces inflation over time. Sure, you could time the market, flip a house, or buy a rental, but that’s different from expecting your primary home to earn you a sweet return. The investing myth is another valid argument against buying. Many people buy homes they can’t afford or stretch their finances to pay for expensive home projects because they buy into this myth.

The bottom line is: sometimes it’s smarter to rent, and sometimes buying can work in your favor. Rather than giving in to one side or another, it’s more helpful to learn the rules, crunch the numbers, then do what works—and feels right—for you.

For more information on apartments, contact HHHunt.

#HowYouLive

Excerpts: twocents.lifehacker.com

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


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


Delivered by FeedBurner