Deb Evans ABR,CSG - ERA Key Realty Services



Posted by Deb Evans ABR,CSG on 1/14/2020

Photo by Athitat Shinagowin via Shutterstock

Youíll often hear it stated that paying rent is throwing money down the drain. As a motivation to buy a home, however, that might not be the best idea. A rule of thumb is that if you can purchase a home for fifteen times what you currently pay annually in rent, buying makes sense. In real numbers, if your rent is $1,500 a month, your annual rent is $18,000. Fifteen times that amount is $270,000. That means if you can buy a comparable home for around $270,000, it makes sense to buy rather than to rent because youíll break even in 15 years and will accrue equity beyond that.

But even if housing prices fit that scenario, what is your personal criteria?

Is renting throwing money away?

That depends. There are multiple rent vs. buy calculators online that allow you to plug in the variables that apply to your situation. The adage that itís always better to buy may not fit into your lifestyle, career goals or plans. Donít buy just because someone tells you that youíre tossing away your life savings. After all, if you have enough for a down payment, you can invest it in something more liquid than property.

But, buying is a fantastic idea if you love the community, see yourself living there for at least five years, and want to own your home.

There are some guidelines, however, to help you determine if you are ready. These require that you keep financial considerations separate.

  • Do you still have student loans? If so, determine the impact that more debt places not just on your pocketbook, but on your psyche. If having education debt stresses you out, adding more debt to that is not a solution. Instead, before you buy a home, work with a student debt counselor to see if you can make some headway on your loans.
  • Do you have an emergency fund? For some people, if they get a flat tire or the fuel pump goes out in the car, the burden of taking care of that emergency can throw all caution to the wind. Having an emergency fund of a minimum of $1000 for short-term emergencies (car repair, flight to a family funeral, etc.) and three to six months for long-term emergencies (extended illness, job loss) protects you from disasters lurking around every corner.
  • Can you set aside money for home maintenance? If you replace your rent one-to-one with a mortgage (even including taxes, PMI, and homeownerís insurance), you still need funds for regular home maintenance. Generally, youíll want to set aside about one percent of the cost of the house minimum for annual maintenance. If you buy your home for $300,000, youíll need to set aside an extra $250 a month (3% or $750 a month is better) to cover repairs, maintenance, and upkeep of your home.

The other questions you want to answer are: How secure is your job? Could you be moving within five years? Do you qualify for a good interest rate? Buying just to escape renting is never a promising idea. But if the answer to these questions leads you to believe homeownership is right for you, in the right location, and itís the right time, find the right real estate professional to help you get there.




Tags: buyer tips   renting   New Buyers  
Categories: Uncategorized  


Posted by Deb Evans ABR,CSG on 6/6/2017

If youíre making the transition from renting an apartment to buying a home, it can be difficult to ensure you have a place to stay while you search.

There are a number of reasons you may need temporary housing while house-hunting. Maybe youíre moving to a new state and need temporary housing while you search in the area. Or, maybe you just donít want to sign a year-long lease on a new apartment that you donít plan on staying in for a full year.

Regardless of the reason, weíve got you covered. In this article, weíre going to talk about how to find temporary housing while you navigate your way toward homeownership.

Short-term rentals and sublets

One of the most convenient way to rent an apartment while you search for a home is to simply find short-term rentals.

Landlords use leases for a number of reasons. Among them is knowing that they can count on a tenant to stay long enough to be worth the hassle of going through the rental process.

However, there are some landlords who cater to people who need to rent for only a certain amount of time--namely business professionals and college students. Landlords rent to these people with short-term leases because they are certain that they will get the full lease amount in pay.

Similarly, searching for sublets is a good way to find an apartment on the short-term. Sublets are often cheaper than their normal renting price because the tenant needs to find someone soon. Youíre especially likely to find a sublet if you plan on moving in May or June when college students are going home for the summer.

Another service that could be helpful is Airbnb. Many people think of Airbnb as a tool for finding a vacation home or spare room while traveling. However, there are also a number of short-term rentals on the site. You can simply enter the dates youíre planning on staying and compare results. Just be sure to read reviews of the house to be sure that youíre dealing with responsible and trustworthy property managers.

Words of caution

While short-term rentals can save you money while you search and help you avoid a lease, they do come with risks. For example, if renting off of Craigslist, never send sensitive data, payments, or bank account information before verifying that they are actually the manager of the property.

If you do decide to sublet an apartment, take photos when you move in so that tenants or landlords donít try to hold you liable for any damage caused before or after you leave.

Finally, if you decide to go with a service like Airbnb or extended stay hotels because they appear cheaper than renting, remember that you wonít be able to store your belongings there and might have to pay for storage and a moving truck to transport your belongings. These extra fees can add up quickly over a couple months.

Once youíve determined your options for temporary housing, hunting for your new home will become much easier.




Tags: house hunting   renting   sublet  
Categories: Uncategorized  




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