Rent vs. Buy

To Rent or to buy? That is the question! With the amount of foreclosed properties, short sales and bankruptcies occurring in this economy there has been a huge fluxuation of renters in the market like never before. These instances, unfortunately due to their decreased credit scores and rules, renting may be the only option at this point and time.

The people I'd like to focus today's discussion on, are those that already are renting or may be thinking of renting. In Las Vegas and other cities in my local market, I'm seeing a big majority of young families, recent graduates, and retired families renting properties. These renters are paying any where from $900 to over $2000 per month in certain areas in the valley, when they could be using that money towards the purchase of a property... and more often than not, could be paying less per month on a mortgage!

So, let's take a look at the differences between buying and renting.

As you can see from this example, when you "RENT" the longer you stay in the property the more you end up "WASTING". In the example shown above, the renter is losing out on $54,000 if they stay 3 years, and $90,000 if they were to stay for 5 years. Could you use $54,000-$90,000 in your savings? I'm sure you could come up with better uses of that money in this economy!

Now let's look at if you "OWNED" a property... notice that the property tax you pay each year is a deduction, and the amount of money you receive if the market appreciated even 1%... you are receiving an extra $66,514 in 3 years or roughly $125,000 in just 5 years. Notice your "costs" in this example are at a 6.5% interest rate- imagine how much you can gain at the current interest rates of around 4%! Plus, you'll be getting in when home prices are low so you can save even MORE money and you have the potential to gain quite a bit of equity as the market rebounds!

This past year in fact I helped a couple get into their first home, where their payments ended up being around $800 a month!! As I've said time and time again, there is no time like the present to buy real estate. There is already talk that interest rates will go up before the end of the year, and this may be your last opportunity to take advantage of these historic lows. So contact me today and let's get started!