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The Sad Truth About "Investing" in Homeownership – Raleigh, NC

Joseph Coupal - Wednesday, July 27, 2016

Settling down and buying a home is often painted as an integral part of the American Dream: You stop paying rent and own your destiny — with a great investment, to boot.

That message certainly seems to resonate with many Americans, at least according to the results of a new survey from Bankrate, which found real estate to be the most popular "investment" that respondents named, ahead of the stock market, gold and cash savings.

The problem?

While homeownership means you're no longer paying your landlord, your pockets won't necessarily be overflowing, either. As Robert Shiller — a Nobel Prize-winning economist who helped create a leading home price index — has cautioned, land and homes do not rise in value faster than inflation, at least over the long term. So not only does investing in real estate carry many costs and risks, but people have developed an exaggerated idea of how much their homes will appreciate in value.

Compared to, say, stocks, real estate is relatively illiquid, meaning that you can't easily buy it and sell it whenever you want; finding a buyer can take a long time. That can be dangerous for homeowners when housing prices take a sudden dive.

Properties also need to be maintained, whether the owner rents it out or lives in it themselves, which can be incredibly expensive: On average, these costs are between 1% and 4% of the home's annual value each year, an extra expense that young homeowners should not forget.

"If it's a home you purchase ... you have a mortgage plus any taxes, plus any insurance that you have to play yearly," said Alexa von Tobel, a certified financial planner. "When you step back and look at that, most people tend to overspend."

Many prospective homeowners underestimate upkeep costs for homes, to say nothing of bigger repairs.

There's a big difference between thinking of your primary residence as a "real estate investment," and actually being a real estate investor who buys and sells investment properties, which can be quite lucrative if you have the necessary capital to get started — provided you know what you're doing.

Over the last 100 years, the price of land has risen by an average of about 1% per year. By contrast, the S&P 500, which tracks the stock prices of major U.S. companies, has grown about 10% per year.

Now, if you are thinking of buying a home, there are plenty of good reasons to do so. The key is recognizing that the purchase is more of a consumption choice (like buying a car), than an "investment," which better describes how one should think of their retirement account.

For more information on apartments in Raleigh, NC, contact Auston Grove.

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Money

Reduce Stress of Apartment Hunting - Raleigh, NC

Joseph Coupal - Thursday, July 21, 2016

Moving is stressful in more ways than one, and it can be especially taxing when you are apartment hunting in Raleigh, NC for the first time. The first thing to do is, of course, relax. Thankfully there are a lot of steps you can take to ease the stress associated with hunting down your first apartment.

Know Your Needs

It’s important to know your specific needs when beginning your search for an apartment. Have pets? Make sure the places you are looking at are pet friendly. Know what your maximum budget is and figure out what exactly your deal breakers are. No laundry in unit or on site? If lugging your laundry to a laundromat on laundry day sounds like a nightmare to you, it’d be smart to look elsewhere. However, remember an apartment can’t have everything, so truly contemplate what you believe to be most important to your new living space and go from there.

The Initial Search

So you know what area you want to live in but aren’t sure of where to start. Well, there’s an app for that. Actually, there are a ton of applications you can download to your smartphone free of charge to make the search less exhausting and actually pretty fun. Two helpful apps are PadMapper and Zillow which both get the lowdown on listed apartments in your area. They have helpful filters so you can easily sort through the apartments that accommodate your specific needs.

Ask Questions

Most people have gone through this experience and would gladly give you the advice or information you need. Spread the word you’re moving into your first apartment and lend an open ear to people who are willing to share some of their helpful tips. One quick way to receive a large amount of feedback is utilizing your social media outlets.

Research

Do some research and learn your rights as a tenant. Just simply being informed with basic information will lessen the weight on your shoulders. Landlord-tenant law vary by state so it is important to get the information specific to where you plan on living. Knowing your rights will leave you feeling more confident and at ease when it comes to signing the lease and contract.

Details, Details, Details!

When viewing potential apartments, look at everything, and I mean everything. Look in closets, check sink and shower faucets, and even give the toilet a flush. It’s smart to take a few pictures to look back on too. If a place is in your price range, don’t sell yourself short. Don’t be afraid to ask the agent about things that are concerning such as typical utility bills or potential leaks. It would be smart to bring a trusted friend with you to a viewing so you can have support and an extra set of eyes to look over potential places.

Trust Your Gut

You know yourself best, and if something doesn’t feel right about a certain place don’t shove that feeling to the wayside. Sure, no apartment is perfect and not everything can always be in our control, but remember you are allowed to walk away from anything you don’t feel comfortable with.

For more information on apartments in Raleigh, NC contact Auston Grove.

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Empowher.com

Are You Throwing Your Money Away When You Rent? – Raleigh, NC

Joseph Coupal - Wednesday, July 13, 2016

There are a number of reasons for wanting to buy a home over renting and most are valid. Some people want to buy because their current rental unit may have restrictions on owning a pet, while home ownership would, in most cases, not have this limitation. Others want to diversify their assets beyond the stock market. Still others may be pressured by friends and family – loved ones may claim you are simply throwing your money away if you rent, but with owning, you could be building equity every month.

Is this really true?

You Are Building Equity As A Homeowner, But…

It is true that you are building equity each month as a homeowner. However, the amount of equity you’re building is equivalent to the portion of your monthly mortgage payment that goes toward paying down principal.

Because most mortgages are structured to have a uniform monthly payment for the life of the loan, in practice, this means that your early payments will consist of more interest than principal. So while you are paying down principal and building equity, you may not be building as much as you imagined.

For example, let’s say you had a 30-year fixed rate mortgage with an interest rate of 4% and a starting loan balance of $500,000. Your monthly payment would be $2,387, but just 30% of this payment or $720 would go toward “building equity” during the first month. Over the first five years, less than 35% of your total mortgage payments go toward paying down principal.

Yes, equity can make you feel good, but it’s not really money you can use freely until you’ve sold the property. And if you end up selling in a down market, you may not end up realizing as much equity as you expected.

You’re Still Throwing Money Down The Drain As A Homeowner

While you are building some equity when owning a home, your monthly housing costs consist of much more than just principal payments on your mortgage. In fact, you could say that mortgage interest, taxes, homeowners insurance, homeowners association fees, and ongoing maintenance costs are all “wasted money” that you throw down the toilet as a homeowner.

People often say that buying a home was the best investment they ever made. The problem is that their return as investors is often worse than they think. When calculating how much they made on a home, most people do not include the out-of-pocket costs they incurred through things like replacing pipes, repairing roofs, or numerous other unexpected expenses that come up. As a tenant, your costs are fixed, but as a homeowner, you are on the hook for any repair that comes up.

The Transaction Costs Are Large For Buying!

The costs of buying and selling real estate are significant, and those costs don’t go toward building equity either.

Buying a house entails many transaction costs that add up to three, four, or five percent of the price of the home and sometimes even more. Many advise that homebuyers should have at least a five-year time horizon or they risk having those transaction costs eat into any gains they were hoping to get out of the sale of their home. Even worse, those costs can lead to a loss, if the local market is soft.

Buying involves commitment and generally, commitment has shown over many centuries to deliver great rewards. It makes sense to buy if you want to commit to a home and location for the long-term. Anyone seeking short-term rewards is better off renting.

Are You Telling Me I Should Rent?

In certain circumstances, it may make sense for you to rent over buy. It really depends largely on your time horizon, financial situation, future plans, and economics of your local area.

Whatever route you choose, just remember to take into account all relevant factors necessary to come to a thoughtful decision. And next time someone tells you you’re simply throwing away money by renting, you can hit him with some knowledge.

For more information on apartments in Raleigh, NC contact Auston Grove.

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Forbes

In Raleigh, NC Your Paycheck Goes Farther

Joseph Coupal - Tuesday, July 05, 2016

Are you considering relocating for a job or for a place where the dollar goes further? You may be wondering which major cities are providing employees with the most favorable combination of wages and cost of living.

Well, Forbes has published a list of the top 25 Cities Where you Paycheck Goes Furthest. To determine this list, job search and salary comparison site Glassdoor considered cost of living as determined by the ratio of median base salary to housing. Median annual base salary for each metro is based on a minimum of 1,000 salary reports shared by employees in that metro on Glassdoor over the past year, April to April.

No. 25 Raleigh-Durham, North Carolina
Median base salary: $62,000

For more information on apartment in Raleigh, NC contact Auston Grove.

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Forbes

Duke University on List of Highest Salaries After Graduation

Joseph Coupal - Tuesday, June 28, 2016

College is an investment, so which schools make sure you get a return? With college costs and student-debt levels reaching an all-time high, it’s important–we’d argue necessary–to think about which schools produce the highest earning alumni. For some this is a practical matter, with big earnings as a path to quickly pay off any student loans. For others, it is a matter of life ambition to move up the financial and social ladder. FORBES researched and rounded up a list of the top 25 colleges where graduating students go on to earn the highest mid-career salaries, meaning they have worked for at least 10 years.

16: Duke University, Durham, NC

  • Mid-Career Earnings: $92,350
  • Overall Best Value Rank: No. 31
  • Top College Rank: No. 22

For more information on apartments in Raleigh, NC contact Auston Grove.

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Forbes

Best Cities for Recent College Grads - Raleigh, NC

Joseph Coupal - Monday, June 20, 2016

Finding a job after college is imperative for many college seniors and some cities offer more career opportunities than others. As we approach graduation season, NerdWallet crunched the numbers to find the best cities in the US for recent college graduates. Can you guess which city came out on top?

7. Raleigh, NC

Population between 20-29: 19.4 percent
Population 25 or older with a Bachelor's degree: 31.9 percent
Median earnings for Bachelor's degree holders: $45,495
Cost of living index: 93.6
Workers with management, business, science or arts jobs: 46.3 percent
Unemployment rate: 5.1 percent
Overall score: 69.81

Raleigh’s population is highly educated, with 31.9 percent of residents 25 and over holding a Bachelor’s degree—the third highest proportion of the nation’s 50 largest cities. Raleigh’s major industries include manufacturing, aerospace, biotechnology and green energy. Two of the top employers in the area are SAS Institute, Inc., which is headquartered in the region, and North Carolina State University.

For information on apartments in Raleigh, NC contact Auston Grove.

CS Monitor

Raleigh, NC: One of America’s Cities of the Future

Joseph Coupal - Wednesday, June 15, 2016

Which cities have the best chance to prosper in the coming decade? The question is a complex one, and as the economy changes, so, too, will the best-positioned cities.

To identify the cities most likely to boom over the next 10 years, we took the 53 largest metropolitan statistical areas in the country (those with populations exceeding 1 million) and ranked them based on eight metrics indicative of past, present and future vitality. We factored in, equally, the percentage of children in the population, the birth rate, net domestic migration, the percentage of the population aged 25-44 with a bachelor’s degree, income growth, the unemployment rate, and population growth.

The results show two divergent kinds of ascendant cities. One is driven by the tech industry, the in-migration of educated people and sharply rising incomes; the other type is what we describe as “opportunity cities,” which tend to have a diverse range of industries, lower costs and larger numbers of families. We may be one country, but the future is being shaped by two very different urban archetypes.

No. 5: Raleigh, North Carolina

Pct. Of Children in Population (5-14): 14.7%
Job Growth, 2010-15: 15.4%
Population Growth, 2010-14: 10.0%
Net Domestic Migration, 2010-14: 11.0 per 1,000
Birth Rate, 2010-14: 12.9 per 1,000 women
Bachelor's Degree Holders (Pct. of Pop. 25-44): 49.0%

For more information on apartments in Raleigh, NC, contact Auston Grove.

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Forbes

Millennials in Raleigh Are Taking Longer to Buy a Home

Joseph Coupal - Wednesday, June 08, 2016

A report found student debt reduces millennials’ savings for down payment, making it difficult for college-educated millennials to own homes in the Raleigh-Durham area.

The report, released last week by apartmentlist.com, found college-educated millennials with student debt need to save for an average of 10.2 years to pay a 20 percent down payment on a home, compared to around five years for those without.

But in Raleigh, college-educated millennials with student debt need to save for 15.2 years, while those without student debt need to save for only 5.4.

Here are some other highlights from the report:

  • Millennials without a college degree in Raleigh need to save for 10.4 years.
  • Nationally, 58 percent of college-educated millennials have monthly student loan payments, paying an average of $410.
  • In Raleigh, 52 percent have student debt, with 33 percent paying at least $300 monthly.
  • College graduates without student debt save $270 monthly for a down payment, compared to $110 for graduates with student debt.
  • Millennials without a degree save $140 per month.

Although rising rent and student debt are hindrances for millennials wanting to own homes, the report suggests that delaying homeownership is partly by choice. The report said college graduates with debt have higher incomes than those without, but after higher taxes and student debt payments, their disposable income is about $1,100 lower. Despite these differences, both groups spend roughly the same amount on their expenses, suggesting college-graduate millennials with student debt are choosing to cut back on savings for homes despite being able to afford them.

For more information on apartments inRaleigh, NC contact Auston Grove.

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bizjournals.com

Millennials are Moving to Raleigh, NC

Joseph Coupal - Tuesday, May 31, 2016

It’s not exactly a newsflash that New Yorkers are leaving the city in droves in favor of Florida. What may come as a surprise is where they’re going.

According to a new report by Realtor.com, Tampa and Jacksonville are the top two destinations in the country for northerners relocating to sunnier climes. Also in the Top 10 is Raleigh, N.C.

Millennials aren’t always following their elders. First for the 24-34 age group is San Antonio, Texas, but rounding out the Top Ten are Charlotte and Raleigh.

Driving the migration are weather, housing and employment. The numbers tell the story. But of course, our weather is better.

Other points of national exodus: Chicago; Detroit; San Jose, Calif.; Los Angeles; Milwaukee; St. Louis; Cleveland; San Francisco and Philadelphia.

Data was based on realtor.com search traffic, cross-metro moving requests on moving.comand U.S. Census Data.

For information on apartments in Raleigh, NC contact Auston Grove.

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miamiherald.com

Raleigh, NC is #8 for Best Cities for Job Seekers

Joseph Coupal - Wednesday, May 25, 2016

College grads and mid-career professionals alike may find themselves in search of a city that offers the best of both worlds: great job opportunities and a healthy work-life balance.

Using those measures, as well as the cost of living and job satisfaction, employment site Glassdoor has crunched the numbers and come up with the top U.S. cities offering the best opportunities for workers. While some of the biggest American cities made the list, many of those top-rated are midsize metropolitan areas that are transforming their economies with tech and health care jobs.

That may provide some relief to job seekers who worry that opportunities exist only in expensive cities.

Those on the hunt for new career opportunities may want to consider some of the smaller cities that rose to the top of the rankings because they're places where typical workers can afford to live and get a foothold on the economic ladder.

"These are smaller, midsize cities that have really great job markets that are growing," said Allison Berry, a spokeswoman with Glassdoor. "The thing that's standing out for us in the list is that bigger doesn't necessarily mean better."

#8 on the list of Best Cities in US for Job Seekers: Raleigh-Durham, North Carolina

Raleigh-Durham benefits from its location in the so-called Research Triangle, where universities such as Duke and University of North Carolina at Chapel Hill are located.

Not surprisingly, Glassdoor says the area's three hot jobs are registered nurse, research associate and software engineer.

The region of roughly 2 million residents has almost 35,000 job openings, with a median base salary of $62,000.

For more information on apartments in Raleigh, NC contact Auston Grove.

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10tv.com