Apartments Raleigh NC Blog

RSS Grab the Auston Grove RSS Feed

More Boomers are Renting Apartments – Raleigh, NC

Joseph Coupal - Wednesday, December 07, 2016

Auston Grove Apartments, Raleigh, NCBaby boomers are altering the American Dream.

After having the home in the suburbs, the kids, the two cars, and maybe even the picket fence, a growing number now want to ride elevators to rental apartments and walk out the door to restaurants. When the kids are grown, an increasing number of empty nesters are selling homes and aspiring to live like urban millennials — in rental buildings full of amenities and free of lawn mowing, shoveling, mortgages and property taxes.

It's not unusual for empty nesters to consider downsizing and avoiding tasks such as yard work. But typically downsizing has meant buying smaller homes or condos. Now, for a generation with a reputation for setting trends and yearning for freedom, an increasing number want to rent rather than own.

“It's nice to have freedom," said one man, who moved into an apartment with his wife after selling their home about three years ago. He now walks to work, and his wife says she feels like she's on vacation every day. Apartment living frees up time spent on maintenance and they walk to restaurants, plays, movies and musical events.

"We both feel like we are in our 20s."

The number of boomer renters is still small. But there were just 10 million in their 50s and 60s in 2005, and in 2015 there were 15 million. They account for more than half of the nation's renter growth in the last 10 years.

It is a "dramatic increase," and a trend that's likely to continue as the giant generation of 77 million people, born between 1946 and 1964, ages and seeks easy living.

At a National Multifamily Housing Conference, "landlord after landlord mentioning the surprising surge in older renters." Many of the boomers have sold homes and have been looking for luxury apartments in walking distance to stores and entertainment.

In many metro areas, older renters are driving demand. There is an increase in people "who don't see their primary residence as an investment" and don't want their retirement money tied up in a home.

Renting is a unique twist for many boomers, who began their adult lives when the sheer size of their generation starting households drove a sharp climb in home prices in the '70s and '80s. For years many assumed renting was a waste of money and a home an essential investment. But after living through the recent housing crash, that assumption has been tarnished and renting now seems fine.

You aren't going to get equity quickly any longer. As empty nesters, couples can sell their three-bedroom home and renting can be a short-term experiment that would allow them to move easily, and without selling costs, if they changed their minds. Many have no urge to move.

Homeownership among people 50 to 64 slipped 5 percentage points between 2005 and 2013. Part was driven by foreclosures and job loss in the recession. Others are transitioning to renting as a choice. They want "cost-effective options that demand less time, physical effort and money to maintain." As people enter their 70s, it is expected that the desire for ease and safety will intensify.

The combination of 8 million foreclosures and a 10 percent unemployment rate during the housing crash and Great Recession sparked a surge in rentals among all age groups during the last few years. There are 19 million renters who previously owned homes. But older boomers were not as hard-hit in the housing crash as people ages 36 to 55, because people in their 50s and 60s tended to have purchased homes before the housing peak and therefore had more equity to absorb losses.

The interest in potential boomer renters is coming from developers seeing opportunity in the luxury market.

Boomer parents are also being tempted to rent as they see the housing their children are considering in new luxury buildings.

"They see the light and the view, and they are jealous," said one developer. "They want a vibrant life" instead of isolation in empty homes in quiet suburban neighborhoods. "They are busy with their phones and iPads, and can live in a new building for less than a mortgage and stop writing checks to the handyman and the landscaper. They don't have to worry about the snow."

Although luxury buildings have been especially popular with empty nesters craving activity, boomers are also renting near suburban areas where they raised families. They want to continue ties with churches and communities.

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

#HowYouLive
Chicago Tribune

Young Professionals Are Choosing to Rent Instead of Buy - Raliegh, NC

Joseph Coupal - Tuesday, November 29, 2016

Auston Grove Apartments, Raleigh, NCHome ownership has reached a five-decade low due in part to the fact that millennials have historically low ownership rates compared to other generations at that age.

Home ownership has always been a part of the American dream. So why aren’t more millennials willing to purchase a place to call home? Should they purchase homes or is it smarter for them to rent? There are several factors to consider.

The Relocation Factor

After the housing crash of 2007, many millennials began to realize home ownership may not be quite the American dream as it has long been touted by realtors and organizations who encourage home ownership.

In fact, home-buying may not be a good idea for the vast majority of millennials – at least not right now.

Not only does it represent a huge financial risk, but it ties you down to a specific area – which may not be very convenient if a higher paying job which required relocation came calling.

For those who want to focus on establishing their careers, some experts highly recommend renting.

Another expert doesn’t think there is a “correct” answer, it depends on each millennial’s individual circumstances.

How long do you plan on staying in the area or in this particular home?  Except in rare cases where you’d be buying into a rapidly appreciating market, or you’re renovating a total fixer-upper, if you don’t plan on staying more than a minimum of 2-3 years, it probably makes more sense for you to rent.

The Debt Factor

While some millennials may not want to purchase a home, many simply are not able to because of debt. Lingering debt and financial worries play a critical role in the home-buying decision.

Despite millennials’ well-publicized low rate of homeownership, our index found 76 percent feel being able to save for a home remains important to achieving an ideal home life – but only 37 percent feel satisfied in their ability to save.

Any millennials who are thinking about purchasing a home will need to understand and then start building their credit score so they can qualify for a mortgage when the time comes.

Perceived job security is another contributing factor. And financially speaking, one needs ample money for a down payment, pre-paid items at a closing like property taxes, and also insurance and renovations.

Even if you have a stable income, your home shouldn’t eat up all of your money.

If it would take every penny of your savings to make a down payment on a home, and you’re not certain of your ability to replenish that in the future, you may want to factor that into your decision.

There are many loan programs out there that can help first-time home buyers with down payment assistance, or that don’t require a severed arm and leg in order to get a mortgage. But millennials should also consider their comfort level with the final estimate.

A home is a huge purchase and demands substantial responsibility in terms of monthly payments and ongoing upkeep, so it’s important to be realistic when it comes to assessing whether you can and should purchase a home.

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

#HowYouLive
goodcall.com

Should Millennial Rent or Buy? – Raleigh, NC

Joseph Coupal - Tuesday, November 22, 2016

If you’re a millennial then you’ve given some thought about whether you want to rent or buy the next place you live in. With so much to consider it’s hard to break it all down. After all, questions like, "when is a good time for me?" or, "can I even afford a home?" are difficult to answer. Here are some of the factors you should consider. Take a look at the most important factors in considering the question, “should I rent or should I buy?”

Expenses

Rent – When it comes to expenses, or the cost of living outside of your monthly payment, renting comes up as a winner. If your dishwasher breaks your landlord picks up the tab. Likewise for any other appliance, plumbing, or structural issue. That means you don’t have to keep emergency funds for the unexpected when it comes to your living situation. It’s also time consuming and it costs a lot of money to organize labor, shop for the best deal, and hire professionals to perform maintenance.

Buy – Expenses come up constantly when dealing with a home purchase, from start to finish. Let’s revisit the scenario when your dishwasher breaks. You’ll have to pay a pretty penny to replace it. That’s why experts say it is imperative to keep emergency funds on the ready. There will always be an expense that comes up monthly, yearly, or once a decade. On the flip side, when something fails that will usually prompt you to make an improvement. These add up and equate to a higher value for your home.

Savings

Let’s talk a little bit more about savings when it comes to renting versus buying a home. There are savings either way but there are very different reasons. When buying it gets complicated and we’ll show you that there is a lot to consider.

Rent – We already discussed savings in the form of your landlord picks up the tab when something requires attention. The fact is that renting is usually cheaper for the first few years (we’ll show you an example in a moment). To add to that, if your rent is less than a potential mortgage payment then you can use that extra cash for savings, investments, or retirement.

Buy – A moment ago we mentioned a word that is very important to home owners: “equity.” Every payment that you make, whether it’s your down payment or your monthly mortgage payment, you’re increasing your equity in your home. When making your monthly payment some of it is going toward the principle balance of your mortgage. This means you’re gaining equity every month you live in your home. There’s just no comparison for this advantage when put up against renting.

Timing

When looking back on life with the luxury of hindsight we realize that timing plays a crucial role in our decision making. Since hindsight doesn’t play a role in the decisions we make in the present, let’s look at what considerations do play a role if you’re asking, is this the right time to buy?

Rent – For the person who is unsure where they’ll live in the next few years, renting is probably your best option. Renting affords you the advantage of being able to uproot and move to an area closer to your job. It’s easier to move to a different part of the country, or maybe a fun location like near the beach or downtown in a major city. Rent payments and housing prices are high in these areas. You might not want to stick around too long.

Buy – The cost of purchasing a home and moving is an important factor to consider when thinking about how long you plan on living in your home. It’s expensive to sell a home. Real Estate agents make a lot of money off the sale of your home. That’s money that you’re paying. Not to mention that if you buy again you’ll have to pay the closing costs for that transaction. The flip side is that you will probably make a profit off of selling your home. The point is the more buying and selling you do, whether you’re savvy or not, the more fees you’ll pay.

Rent vs Buy

With all of these variables in mind, it’s time to create some examples that will show you when it’s worth it to rent versus buy. We’ll use the tools we provided such as the rent versus buy tool above, and then plug in the median home prices weighed against average rent costs of three major cities. These figures are provided by trulia.com or Zillow.com, and rentjungle.com respectively. Plug in your own rent amount and the value of the home you have your eye on. You’ll find out for yourself if you can afford it and how long it will take for you to save money.

You probably get the sense that asking if renting or buying is better, the answer is hard to come by. And that’s actually a good place to start. This is a decision that requires a lot of care. Weighing all the pros and cons is important, consider the right factors.

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

#HowYouLive
creditcards.org

Before Signing Your Lease – Apartments in Raleigh, NC

Joseph Coupal - Wednesday, November 16, 2016

While they are anything but entertaining, a lease agreement is one contract you really should read before signing. Before an agreement is signed, it is often easy to address specific terms. But, once it is signed, resolving even minor issues can be difficult.

A good lease agreement avoids unwelcome surprises. A landlord and tenant nearly always discuss the rent, when it is due, and the length of the lease term. But, unless the lease agreement makes it clear, there can be disputes over things like who is responsible for repairs, property taxes, and insurance; whether there are any automatic renewals or rent increases; if or when late fees or interest charges apply; and in what situations deductions may be taken from the security deposit.

Concerning repairs, a residential landlord is generally responsible unless the repairs are needed due to the tenant’s carelessness.

With respect to security deposits, the lease should state what is expected of the tenant upon moving out, what will happen if those expectations are not met, and how much of the security deposit will be refunded.

Some lease agreements include options to renew the lease. To avoid having to move again, a tenant may want to negotiate the right to renew at the end of the initial term.

Wise landlords also contact a would-be tenant’s prior landlord for a rental history. Some perform credit checks on all prospective tenants. Likewise, some prudent tenants ask around to neighbors and may even try to contact the prior tenant for information about the property and to find out how responsive the landlord has been to maintenance and repair issues. Whether you are a landlord or a tenant, doing your homework before renting or signing can pay big dividends.

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

#HowYouLive
The Spectrum

11 Signs You're Not Ready to Buy a House – Raleigh, NC

Joseph Coupal - Tuesday, November 01, 2016

Making the leap from renting to buying is thrilling and liberating. But it's also a big decision, both for your future and your finances.

It's a long-term commitment that requires strong financial standing, and in many ways it's about more than just money.

If any of the following signs strike a chord with you, you may want to delay the home-buying process.

You have a low credit score

Before considering home ownership, you'll want to check your credit score.

The higher your score, the better the interest rate on your mortgage will be. Good credit can mean significantly lower monthly payments, so if your score is not great, consider delaying this big purchase until you've built up your credit.

You're doing it as an investment

If someone asks why you want to buy a house and your first answer is something along the lines of "Because I'm wasting money on rent" or "Because it's a good investment," you might not be mentally prepared for all the responsibilities that come with home ownership.

When you look at the average price increase of a home across the country over the last 100 years, it's only about 3%. If you take away extra costs plus inflation, you're not really making any money on average on a single-family home.

It's smarter to look for a house that meets non-monetary goals: It's in your dream neighborhood or it's a good place to start a family. A home is a utility, not an investment.

You have to direct more than 30% of your income toward monthly payments

Personal finance experts say a good rule of thumb is to make sure the total monthly payment doesn't consume more than 30% of your take-home pay.

Any more than that, and your finances are going to be tight, leaving you financially vulnerable when something inevitably goes wrong.

While there are a few exceptions, aim to spend no more than one-third of your take-home pay on housing.

You don't have a fully funded emergency savings account

And no, your emergency fund is not your down payment.

We all receive unexpected financial setbacks. Someone gets sick. The insurance company denies a medical claim. A job is suddenly lost. However life intrudes, the bank still expects to receive our monthly mortgage payments ... Finance your emergency fund. Then think about purchasing a home. If you don't have an emergency fund and do own a house, chances are good you will someday find yourself in financial turmoil.

Have the equivalent of a few years' worth of living expenses set aside in case there is a job loss or other surprise.

Unlike a rental arrangement with a one- or two-year contract and known termination clauses, defaulting on a mortgage can do major damage to your credit report. In addition, a quick sale is not always possible or equitable for a seller.

You aren't putting anything into savings

Even with a full emergency fund, you should still be able to continue putting money away for other goals.

If you're saving money every month, that means your cash flow is in good shape, which is a good sign you're ready to buy a home.

If you can't spare anything more than the mortgage payment, consider putting off purchasing a home until your cash flow is more stable.

You can't afford a 10% down payment

Technically, you don't always have to put any money down when financing a home today, but if you can't afford to put at least 10% down, you may want to reconsider buying.

Ideally, you'll be able to put 20% down — anything lower and you will have to pay for private mortgage insurance (PMI), which is a safety net for the bank in case you fail to make your payments. PMI can cost between 0.5% and 1.50% of mortgage, depending on the size of your down payment and your credit score — that's an additional $1,000 a year on a $200,000 home.

The more money you can put down toward the initial purchase of a home, the lower your monthly mortgage payment. That's because you will need to borrow less money to finance the home. This can save you tens of thousands of dollars over the life of the loan.

To get an idea of the savings you'll have to put away, check out how much you need to save each day to put a down payment on a house in major US cities.

You're planning other big expenses in the next few years

It's important to consider your housing budget within the context of your future goals. Keep in mind the next couple of years down the road and what you have coming up.

You plan on moving within the next five years

Home ownership, like stock investing, works best as a long-term proposition. It takes at least five years to have a reasonable chance of breaking even on a housing purchase. For the first few years, your mortgage payments mostly pay off the interest and not the principal. It is recommended to stay put for at least 10 years.

The longer you stay in your house, the more you save. If you sell through a traditional realtor, you pay that person a huge fee — usually 6% of the selling price. Divide that by just a few years, and it hits you a lot harder than if you had held the house for ten or twenty years.

Not to mention, moving costs can be exorbitant on their own.

You won't be able to keep up with other goals

Don't feel like you need to have every penny worth of debt paid off before you can purchase a home. But do a deep dive into why you have debt and how you're planning to deal with it, from student loans to credit card charges.

Why do you have the credit card debt? Was it just a random occurrence where you had to put something on the credit card and you know you're going to pay it off soon? Or have you been spending more than you make and it's increasing over time?

It's okay to still be paying off your student loans or paying down past credit card debt. But if the added costs that come with buying a house — mortgage payments, taxes, and repairs — impede your ability to continue putting money toward those goals each month, you might want to hold off for now and let your other expenses take priority.

You're deep in debt

While it's okay to have some debt, if it's a significant enough amount, it could hinder your ability to buy a house at all. If your debt is high, home ownership is going to be a stretch.

When you apply for a mortgage, you'll be asked about everything you owe — from car and student loans to credit card debt.

If the combination of that debt with the amount you want to borrow exceeds 43% of your income, you will have a hard time getting a mortgage. Your 'debt-to-income ratio' will be deemed too high, and mortgage issuers will consider you at high risk for a future default.

You've only considered the sticker price

You have to look at much more than just the sticker price of the home. There are a mountain of hidden costs — from closing fees to taxes — that can add up to more than $9,000 each year, real estate marketplace. And that number will only jump if you live in a major US city.

You'll have to consider things such as property tax, insurance, utilities, moving costs, renovations, and perhaps the most overlooked expense: maintenance.

The actual purchase price is not the most important cost. What's important is how much it's going to cost to maintain that house.

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

#HowYouLive
Business Insider

Finding the Ideal Place to Retire – Raleigh, NC

Joseph Coupal - Wednesday, October 26, 2016

Once you retire, you're free to head to the beach or golf course. In some cases, you can even dramatically reduce your cost of living or improve your quality of life with a single move. But you want to make sure that a retirement spot will continue to meet your needs as you age. Here are 10 tips for finding your ideal retirement spot:

Seek lower costs. If you can sell your house in an expensive city and move to a place where housing costs significantly less, you can use that influx of cash to help fund your retirement years. If the cost of living is lower, it can certainly let your retirement nest egg last a little longer.

Look for great amenities. Think about how you want to spend your retirement years, and make sure your retirement spot has the resources to allow you to do that. Look for golf courses, pools, fitness centers, parks or other amenities you would like to use. If you want to be pursuing your education, you might be looking for a college or other learning venues. If there are travel options you want to pursue, you are going to need to be near an airport or a train station.

Health care options are essential. Make sure any community you are considering has adequate medical facilities and doctors that are taking on new patients. If you have any ongoing medical condition, or propensity for a specific illness runs in your family, it can be useful to retire near medical professionals who specialize in treating it.

Calculate the tax impact. Taxes vary considerably by state, and you can often reduce your costs considerably by moving to a low-tax place. Take a look at how the state taxes pensions, Social Security and earned income, and also consider the sales tax, property tax and any special tax perks available for senior citizens. It's also important to realize that taxes pay for services, and there may be less help available to senior citizens in low-tax areas.

Aim for proximity to family and friends. Many people want to retire near their children and grandchildren. Family and friends can enrich your life in retirement and provide significant (and often free) help when you need it most. "If somebody has lived in the same place their whole life and that's where their social network is and where the people they depend on are, then it's much harder to pick up and build a new network of support where you don't know anybody and you have to start from scratch. If you do move to a new community away from your support system, you will need to create a new circle of friends. An activity like golf or bridge will get [you] into another social network.

Job opportunities. Americans are increasingly planning to work during the traditional retirement years. If a retirement career is part of your plan, you may want to line up a job opportunity before you make a move. A place that will enable you to do what you want to do with your post-retirement work career is very important. Some people have very portable skills where they could practice anywhere, while some people are more place-dependent.

Transportation options. Many seniors reach a point when they can't or no longer want to drive. Some cities have public transportation systems that give discounts or are even free for senior citizens, or low-cost van or cab services that will help seniors get to doctor's appointments.

Better weather. Some people seek retirement spots with warm weather so they can avoid winter, but you might find that you miss the change of seasons or that warm weather comes with its own challenges.

Test it out first. One way to be more certain that a retirement spot will be a good fit is to test it out by renting. When you first move to a place, it might seem wonderful, but once you have tried living in it, you might find that it doesn't really suit your needs. There's nothing like actually living in a place to know all its little eccentricities and ins and outs.

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

#HowYouLive
money.usnews.com

Raleigh, NC: A City Where Your Paycheck Stretches Farthest

Joseph Coupal - Tuesday, October 18, 2016

Interested in making sure that a large portion of the money you make stays with you and isn’t lost to cost of living? You might want to look into moving to a city like Raleigh, NC, which came in number 25 on the list of 25 Cities Where Your Paycheck Stretches the Farthest.

Stretching your paycheck is a major concern for many looking to live in a cosmopolitan urban sprawl. To showcase cities where paychecks make up a bigger portion of median home costs (usually the largest expense folks have to deal with in their lives), jobs and salary information site, Glassdoor.com, released a study of the most economical cities to live in.

25. Raleigh, NC
Cost of Living Ratio: 30%
Median Base Salary: $62,000

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

#HowYouLive
Forbes

Raleigh, NC: A Great Place to Rent!

Joseph Coupal - Tuesday, October 11, 2016

If you’re looking to move someplace adventurous but aren’t quite ready to settle down and buy a house, then it’s time to choose a great new city where apartment rent happens to be cheap.

And whoa, do we have a some stellar options for you.

Real estate site Housely recently did some research on large U.S. cities (aka cities with more than 200,000 residents) with the cheapest apartment rents. They used data from search engine RentJungle, which updates a database of more than 700,000 listings daily to draw conclusions about rental trends over time.

The Housely findings reveal good news: Many of our favorite under-the-radar cities to visit are also incredibly affordable to live in (Hellooo, Richmond), along with some unexpected picks that are spectacular, too (Hey Las Vegas!).  If you feel like making a move, then it just may be time to make one of these cities your new home. Check out Housely’s 10 big cities with low rent below:

Raleigh, NC
Average rent for one-bedroom apartments: $915
Average rent for two-bedroom apartments: $1,113

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

#HowYouLive

huffingtonpost.com

Is the American Dream Really an Illusion? - Raleigh, NC

Joseph Coupal - Tuesday, October 04, 2016

There is a great illusion when it comes to real estate. This illusion is that owning your home is an investment.

  • When you own real estate and use it to generate monthly income…it is an investment.
  • When you buy real estate and develop it to sell for a profit…it is an investment.
  • When you buy real estate to live in…it not an investment. It is a personal expense.

Where did this idea come from that every American should own their home?

Actually it is possible that Fannie Mae came up with the “American Dream” idea as part of a marketing campaign that everyone should own their own home. Great idea on their part if they really did come up with it

Should I Rent or Buy a Home?

Most people believe that owning a home should be considered an investment. Some go as far to become “house poor” so that they can leverage themselves into a bigger home. This does not seem wise.

There is also a social stigma to being an renter vs. an owner. If you are an owner, you are perceived as being more well off. But are you?

You need to know whether it is cheaper to rent or own in each U.S. city. It is not as clear cut as you might think. It is not always cheaper to own than rent. There are a number of variables to consider, many of which are not often discussed

Regardless of whether you are looking to rent or buy a home then there are a number of factors that you should consider. Here are a few considerations to look at.

Pros and Cons of Whether to Rent or Own a Home

The best way to look at this question of whether to rent or buy a home, is to look at the positive aspects, negative aspects, figure out what is important to you, and then run the numbers to see which is the more financially responsible approach.

What are the positive aspects of buying a home?

  • Sense of ownership: Most people who own their home appreciate the ability to do what they want to their home.
  • Sense of accomplishment: Keeping up with the Joneses is subconsciously important to many people. Being a homeowner brings with it a level of cache and respect with your peers.
  • Capital appreciation:  Home prices have gone up substantially over the past 60+ years. They have been a great hedge against inflation.
  • More choices: While it would be nice to think that you can find any home you want whether you are renting or buying, it just isn’t the case. There are more homes for sale than there are for rent when it comes to single family homes.
What are the negative aspects of buying a house?
  • Illiquidity: A house is an illiquid asset. This means that if you want to sell it, it could take you a month or more than a year to sell it. If you have to relocate to another area, this can make it a bit of a challenge for you. You may even have to heavily discount your asking price to move it quickly.
  • Prices don’t always go up: As we saw in 2007–2010, home prices don’t always go up. When you are buying an expensive asset with leverage, you better hope that prices continue to go up. Otherwise you might be “underwater” on your home equity.
  • Large down payment: It will require a large down payment to buy a home. Not everyone has enough capital to put down a 20% down payment.
  • Costs of ownership: While many people calculate the costs of ownership as mortgage payments, taxes, and insurance, they typically miss a few other items that can add up. Things such as: maintenance costs, landscaping, furnishings, HOA fees, and renovation costs. I will discuss these in the next post of this series.
  • Being “house poor”: Many homeowners stretch financially to buy a house. This puts them in a dangerous position if their financial situation suddenly changes.

What are the positive aspects of renting a home?

  • Mobility: You have the freedom to move anytime you want. While your lease agreement will dictate the terms of your moving out, if you need to relocate you can do it on a short notice.
  • No maintenance costs: Owning a home costs money. The periodic maintenance can be expensive. The house may need to have a new exterior siding, new roof, other other expensive replacements. As a renter you will not be responsible for these costs.
  • Monthly costs: While it will depend on where you live and how much the house costs, but in many cases it is cheaper to rent than to own.
  • No down payment needed: Owning a home requires a down payment; renting does not.

What are the negative aspects of renting a home?

  • Fewer choices: The choices are more narrow for renters.
  • Inflexible ability to “make it yours”: Most landlords do not want the renters to do renovations. This can restrict your ability to fully enjoy your home or make it feel like it is yours.
  • No capital appreciation: If you rent a home for 20 years you will miss out on the potential capital appreciation of the property. This is not a guarantee that appreciation will happen, but if history is a guide then you should consider this.

How Can You Decide?

The best way to decide is to consider each one of these above pros and cons of whether to own or rent a home. How important is it that you have a feeling of ownership, or to make changes to the house? Do you think the prices of real estate are going up or down? What will happen with inflation? These are important questions.

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

#HowYouLive
investopedia.com

Benefits of Buying or Renting - Raleigh, NC

Joseph Coupal - Wednesday, September 28, 2016

This is an increasingly common question. Most families think that rent money is “thrown away.” This belief is often quite wrong.

When you add up the cost of owning a property is at least eight percent of the total cost of the home. This is true regardless of whether you pay cash or finance the entire amount (if you use your own cash, there is an “opportunity cost” of not having it invested and making money elsewhere). One way or the other, you are laying out thousands a year to live in a house you own.

From a strictly financial viewpoint, if the cost to rent is less than the cost to own, renting is just fine. If you can rent that half million dollar house for twenty five hundred dollars a month (thirty thousand a year), you can assume the owner is paying you ten thousand a year to live in their residence.

A girl in New York City who is paying $2,400 in rent for an apartment that sells for over $800,000. That is a rental bargain.

What are the downsides of renting? Well, if the rental cost is more than ownership, it might be better to own (not always, see below). If you don’t want to take the chance of being forced to move, then renting may not be for you. Renters lose out on the appreciation of home prices. But we’ve seen over the last decade that residential real estate tends to be a lousy investment (even over the long run). Another downside is that rents tend to increase every year, whereas technically a mortgage should not. However, many mortgages do indeed increase in cost with inflation and time, and the other costs associated with ownership (repairs, maintenance, insurance, property taxes) inexorably rise.

What are the upsides of renting? Certainly the financial advantage discussed above. Another reason is that it gives you the flexibility of living in an area without being tied down. It is not unusual at all for a family to decide to live in a different town or at least a different area of a town after first moving there. Consider the value of calling the landlord when something is broken as another powerful incentive to rent instead of own.

The point is that we should not reflexively think that renting is a mistake. For many, it makes great sense. For more information on apartments in Raleigh, NC contact Auston Grove.

#HowYouLive
floridatoday.com