Spending the last nine years as both a real estate broker and investor, I now see renting remains a viable option during these hard economic times. The current job market has caused family incomes to fluctuate or be lost completely. Foreclosures are leaving neighborhoods with many empty homes causing crime rates to rise and school districts to make boundary changes forcing families into financial hardship and unimaginable stress. The cost of a rental compared to buying and maintaining a home today makes renting a great option during these uncertain times. Property values have been declining steadily and home owners have lost thousands in equity. For many years buying a home was considered an investment towards your future, although if you purchased a home anytime in the last six years, that home can be purchased today for less.
Have you lost your job or has your income been affected by the economy? Have the expenses of your home been reduced also? No! If you needed to move because of changes in income, family needs, or job relocation you can not sell your home fast enough to accommodate your needs. With renting, there is flexibility with commitment to reevaluate family needs and make better choices. The home does not need to be sold before you move, this gives freedom to your family to make changes as needed. In tough economic times families need the ability to make changes. Maybe having the kids attend a different school or perhaps a bigger home will accommodate the family better. With renting you have the freedom to make these choices.
I am currently renting a three bedroom two bathroom condo with a garage and covered parking in a gated community for one thousand dollars a month. This property was purchased just three years ago for over three hundred thousand dollars and now has a value of less than half. I have full use of all amenities, two pools, Jacuzzi, fitness center, media center, and cable and water are included in my rent. If something breaks the landlord will take care of the problem, not me. The cost to move in was less than twenty five hundred dollars as a renter. The cost to buy a home would have included real estate commission, mortgage fees, appraisal fees, inspection costs, closing costs and so on. That total would have been around eighty thousand dollars and I would have been responsible for fixing anything that stopped working. Every month rent is one thousand dollars, the monthly mortgage payment including taxes and insurance would be over two thousand dollars.
Imagine saving years, finally having enough money to buy a home, only to have the value drop over the next three. Now you owe the bank more than the house is worth and all your savings that were used as a down payment are gone. Because of the economy your job has changed and less money comes in every week, the mortgage payment gets more difficult to pay. Scrapping by yourself as you watch the neighbors leave their homes behind because they can no longer afford them. Half of the homes on the street are for sale, most are vacant and prone to vandalism. This causes the property values to drop even further making your stress level rise, what can be done? As a renter the choices are many, the stress belongs to the owner and you can move at the end of the lease. The savings are still in the bank, your costs were set for the year, and if income has changed you can move to accommodate the changes.
Do not get me wrong, I believe owning a home is the American dream and everyone should strive to buy their own home. The matter of timing and financial stability is what leads me believe renting is the way to go for now. This is a time to save your money and wait for the right opportunity to buy a home. Job security, family needs, and location are all critical choices to make when the time comes to buy. Make sure expenses are easily affordable if income changes. Do not use all of your savings and leave nothing for emergencies, and make sure the neighborhood is a place another family would want to live in case a quick sale is necessary. For now find a nice rental with everything you want for the next year, make sure the monthly costs fit well within your budget, and save as much money as you can. Remember renting can be your key to owning the American dream.
