Thursday, 21 March 2013

Should I buy or rent now?

Should I buy or rent now?

Rob Carrick Globe and Mail Mar 15

Should I buy or rent?

I love to study real estate trends and to learn as much as I can

about property. I personally own a rental property and currently rent a place. I’m always

looking to expand my knowledge on this field. I might be purchasing another rental

property in the near future. I want to be as informed as possible. Buying a place isn’t like

buying a case of beer. Yet we put in more thought into the case of beer sometimes.

Do you have any questions about buying vs renting a home?

This article is going to

pull together my best posts on the topic to help you make the most informed decision on

how you spend hundreds of thousands of dollars over your lifetime.

Bookmark this page.

Let’s not waste any more time folks!

Where should you live after college?



There are many options for
your living situation after college. Everything will totally

depend on your financial situation and where you can land a job (assuming you look for a

“real job”). Most of us will go where the money is.

The options are fairly simple:

1. If you have no money and insane amounts of debt, you need to beg your parents

to let your sorry self move back in.

2. If you have job prospects, you can choose from a variety of options noted in the

aforementioned article.

What if you want to buy a place? I wrote about
what you need in order to buy a home

after college

. It won’t be easy, but it’s possible for you to get your own place in your

early-20s. The goal at this point should be to figure out what you want to do next. Will

you travel? Will you look for more credentials? Will you take the first job that comes

your way?

What if you’re still at home in your mid-20s?



It’s fine to stay with your parents while you save up or try to figure out the rest of your

life. It’s important to take some time to tackle debt and build some savings.

Eventually, you need to grow up. You should
get out of your parents’ place in your mid-

20s. It’s not cool. There’s so much to do in this world that it’s an absolute shame to stay

with your parents and miss out on what’s out there.

What are you going to tell your dates? My roommates are sleeping?

What are you going to do when you want some peace or to relax? Tell your parents to

leave their own home?

If you’re at home and you’e pushing 30, it’s time for a change. Grab life by the balls and

do something. Don’t wait for the universe to do you any favors.

Should you buy or rent a place when you’re making

good money?



You would figure that I covered everything humanly possible with my 2,000 + word post

on
buying vs renting. That post went live many years ago. I thought it was going to be the

definitive piece on real estate. I was wrong. I’ve gone into buying a house vs renting on

numerous occasions since.

Once you start making good — and hopefully this happens to everyone reading this,

you’re going to be debating the idea of buying a place. Instead of giving you a yes or no

answer, I wanted to share some tools that will help you make up your own mind.

What tools can help you when deciding to buy or rent?



This is the best time to be alive. There are literally tools for everything. You can figure

anything out for free without even getting out of bed. There are two key tools that should

help you decide if you should be buying or renting.

Credit score.


Why should you care about your credit score in your 20s?



Your credit score affects your pocket.


Important when finding a place to rent because many landlords will ask for this.


Crucial when trying to get a home mortgage.


Most employers ask for your credit score.


Simply put: money! You can save a few bucks on coffee or you can save

INSANE amounts of money by building up your credit score.

Now that you know why your credit score is important, how do you even figure out what

your credit score is? The answer is below.

A cool way to find out your credit score right now is…


Credit Sesame, a tool where you can check your monthly credit score for free.

Why should you sign up with Credit Sesame?

You’ll know where your stand with your

credit score. If you want to apply for a home mortgage or even finance a car in the near

future, you’re going to want to know what your credit is like. You don’t want to be hit

with an unpleasant surprise when you find out your credit score sucks and that dream

home is nothing but a dream.

They email you updates to your credit score

. Whenever your score changes you get

notified via email in case you totally forget about your credit score while having a life

(you better have a life!).

How can you
improve your credit score so that you can find a place to live?


Pay down debt.


Fix errors on your credit report.


Make your payments on time- always!


Repeat.

Fixing your credit score is sort of like dealing with a hangover. You screwed yourself

over. Now you have to get out of this mess. You have nobody to blame but yourself. The

good news is that the damage is by no means permanent.

Calculator.



There’s a calculator that can help you make this decision much easier. Don’t be a fool.

Run the numbers. See what the numbers tell you.

Rent Vs. Buy Calculator



Should I rent or buy? This calculator does the complicated math for you by

comparing the costs of renting vs. buying a house.

You will need to input several numbers so the calculator can accurately compare

all the factors affecting renting versus buying (interest, property taxes, tax

savings, appreciation, opportunity costs, closing costs, selling costs, etc.).

When you finish make sure to print the handy "rent or buy" comparison table so

you have an easy reference sheet.

Finally, if you need help completing any field just click on that data entry box and

instructions will appear in the area to the right so you know how to answer the

questions. And if you like this calculator please make sure to "like" or +1 to help

us out!

Thanks, and good luck with your new home...

Top of Form


Entry Descriptions Entry Fields Explain/Instruct


Monthly rent ($):

Monthly rental insurance ($):

Estimated annual inflation rate (%):

Purchase price of home ($):

Down payment amount ($):

Length of mortgage term (# of years):

Mortgage's annual interest rate (%):

Discount points on home purchase (%):

Origination fee (%):

Other loan costs ($):

Mortgage Insurance (PMI %):

Homeowner's insurance rate (%):

Monthly association dues ($):

Estimated monthly maintenance ($):

Annual property tax ($):

State plus Federal income tax rate (%):

Interest rate you expect to earn on savings (%):

Expected annual home appreciation rate (%):

Number of years you will stay in this house:

Realtor commission rate (%):

Total estimated cost of renting:

Total estimated cost of buying:

Bottom of Form


Calculator


credit - http://financialmentor.com/calculator/rent-vs-buy-calculator

What do the numbers tell you? Are you ready to buy a place yet? Should you be renting?

What if you can save a ton of money by renting? Then do it! Keep your money in a

savings account

. Leave it under your pillow. Just because you’ve saved up money it

doesn’t mean that you have to buy a place.

Is there anything wrong with renting?



Hopefully you checked out your credit score and ran the numbers from earlier. I’ve

stressed many times that
renting can easily trump owning a place. Before I even move

forward another step, I need to remind you that paying for a roof over your head is not

throwing money away. Throwing money away is when you have one shot too many on a

Friday night.

What are some of the main benefits to renting over owning a home?



Increased flexibility. Letting your lease expire is a simple process. You ever try

selling a piece of property? I thought about it last year but I wasn’t impressed

with the offers that I received. You can move around when you rent. You can get

up and go. The same isn’t true when you own.


You can rent a nicer place. A rarely thought about fact is the idea that when you

rent, you can get a nicer place that you could usually afford to buy. Just saying.


You don’t worry about anything. Anything that breaks on its own is not your

problem. You don’t have to stress about property taxes or new windows. You just

pay your rent and that’s all.

I’ve done both. I’ve lived in a condo that I own. I also currently rent a place out. Renting

comes with much less stress and hassle. Don’t worry about any social stigmas. Your

broke friends can continue being broke.

Should you buy vs rent on emotion?



Absolutely not.

You use your gut instinct on Friday nights or when meeting someone new. You don’t use

your gut before agreeing to buy something worth hundreds of thousands of dollars. While

it’s totally common to fall in love with that house or to want to move ASAP, you really

should slow this process down. You don’t want to feel buyer’s remorse the second that

you walk into your new place.

Before you leave…

As we part ways for today, I want you to always remember that you don’t have to buy a

home just because interest rates are low or because you’re at that age. Do what’s best for

you. It’s your life. If you want to
travel the world first, then do so. If you want to save up

more money, then keep on saving. If you’re happy with the place that you’re renting, then

stay there.
http://studenomics.com/real-estate/should-i-buy-rent-now/


Kevin & Faye Kitzman

Sales Representatives

Remax Real Estate Centre

Direct : 519-577-0603



 


 

Faye Kitzman

Mortgage Agent

Mortgage Intelligence

519-588-0141


M08003930

 



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