The historic multifamily construction boom is already fading
Those same interest rates pushing would-be homebuyers to the sidelines are also hurting multifamily developers.
Those same interest rates pushing would-be homebuyers to the sidelines are also hurting multifamily developers.
From the warm climate, low cost of living, beautiful surroundings, and more – discover 12 important things to know before moving to Tucson.
The post 12 Things to Know Before Moving to Tucson, Arizona appeared first on Redfin | Real Estate Tips for Home Buying, Selling & More.
I’ve been a homeowner for 24 of the last 25 years. Based on this, you might think I’m an advocate of homeownership over renting. That’s not the case. The older I get, the more I appreciate there’s no correct answer in the perennial “is it better to rent or buy?” debate. Sometimes buying a home makes the most sense. Sometimes renting is the smarter choice.
In an editorial in the June 2007 issue of Kiplinger’s Personal Finance, Knight Kiplinger wrote, “It often costs less to rent. The annual cost of owning a property, be it a house or a condo, is usually greater than the cost of renting, after taxes.” I agree.
Today, let’s look at a handful of ways to evaluate the rent versus buy decision from a financial perspective.
One way to tell whether it’s better to rent or buy is by calculating the price-to-rent ratio (or P/R ratio). This number gives you a rough idea whether homes in your area are fairly priced. Figuring a P/R ratio is simple. All you need to do is:
For example, say you find a $200,000 house for sale in a nice neighborhood. You find a similar house on the next block for rent for $1,000 per month (which works out to $12,000 per year). Dividing $200,000 by $12,000, you get a P/R ratio of 16.7. But what does this number mean?
Writing in The New York Times, David Leonhardt says, “A rent ratio above 20 means that the monthly costs of ownership well exceed the cost of renting.” That’s a little opaque, I know. Leonhardt is saying that the higher the P/R ratio, the more it makes sense to rent â and the less it makes sense to buy.
The normal P/R ratio range nationwide is between 10 and 14 (meaning it would cost between $1200 and $1600 to rent a $200,000 house). During the 1990s, just before the housing bubble, the national P/R ratio was usually between 14 and 15 (about $1100 to $1200 to rent a $200,000 house). During last decade’s housing bubble, national price-to-rent ratios rose to 22.73 (in 2005) then to 24.50 (in 2007) before the market collapsed. As most folks were rushing to buy homes, the numbers said they ought to be renting.
Based on this info, I’d argue that:
Nationwide numbers don’t tell the full story, of course. While the national price-to-rent ratio might be around 20, the actual numbers in your city could be very different.
Determine if a move-in-ready apartment is the right fit for you
The post 9 Signs You’re a Good Candidate for Move-in-Ready Apartments appeared first on Apartment Living Tips – Apartment Tips from ApartmentGuide.com.
Between running this personal finance blog, and the fact that I’ve always been fairly open about money, people love talking about money with me. So, over the years, I have heard countless pieces of bad financial advice. Plus, people just love giving others advice. Yes, I’ve heard great financial advice, but some of it has […]
The post I Wish People Would Stop Spreading This Awful Financial Advice appeared first on Making Sense Of Cents.
If youâre currently renting but looking forward to buying your first home, youâve likely done a bit of legwork at this stage. Youâve met with a loan officer who helped […]
The post Blog first appeared on MilitaryVALoan.com.
Internet-originating scams are not uncommon. From work-at-home scams to phishing scams to email lottery scams, some are…
Many people dream of buying a house, but when you buy, you usually need to sell at some point. Even if you never buy a house, you may end up having to sell a house you inherit. There are many ways to sell a house, and most people want to make the most money they … Read more
I have owned rental properties for many years and prefer not to rent to tenants with pets, but that doesn’t mean I never do. There are situations where I will rent to tenants with certain pets. I understand that many people have pets and love their pets, but I also love my rental properties and … Read more
When used responsibly, a credit card may help you boost your credit score, earn rewards, and even be an effective budgeting tool. Getting your first credit card is a major financial step, and knowing how to use one may keep you from causing long-term damage to your financial health in the form of debt and
The post How to Use a Credit Card Wisely appeared first on MintLife Blog.