I don't know why anybody who can qualify for a mortgage would rent right now.

 

I don't know why anybody who can qualify for a mortgage would rent right now.

Well, okay, that's not ENTIRELY true:

I understand if someone can't because their credit is less than perfect, and let's face it - getting a loan HAS gotten more difficult. 

I also understand if people are unsure what the future holds and may or may want to move in a few years.  

And, I understand people that are gun shy because of the state of the economy and they aren't sure if their job will still be around in a few years.

Those are fair reasons, and I definitely don't believe in pushing people into buying when it is not a good fit for them and their life and current situation.

BUT for people with good jobs and no intentions of leaving the area it just makes sense. 

Our market here in Boise, Idaho has gotten to a point where the rents greatly exceed what you could get for a great home with a smaller loan payment.  I could give example after example.  Here are just a few:

I just sold a home to a couple who was paying $600 in rent for a small 2 bedroom, 1 bath apartment (with neighbors on either side, and above and below).  They got a single family home, 3 bedrooms, 2.5 bathrooms, 2 living areas, a much bigger kitchen, an awesome back yard, and best of all, no attached neighbors and they are paying $525 for there mortgage!  That even allows them to save money for repairs and costs of being a homeowner (after all, there are more responsibilities and more costs associated with homeownership vs. renting).  And they are paying down a loan which will give them equity in their home instead of throwing their money away in rent.

Don't forget about these two scenarios that I wrote about a few weeks ago.  I wrote this post talking about purchasing as an investment, but heck, why not look at it has a homeowner as well?

-$390 on a 15 year loan - it would have been even less on a 30 year! Going rent for this home is $750-$800 and vacancy is next to nothing. 

-Still a little nervous?  What about a duplex where you can live in one side and have a renter on the other side?  Mortgage on this home could be roughly $600.  Rents are currently  around $1200 if both units are filled.  If you lived in one home and rented the other side you would be living for free and having someone else pay down your mortgage!

Wow.

This is made possible because of the current low prices of homes and the exceedingly low interest rates right now.  The above are just examples - actually mortgage payment and total costs will be specific to you and your situation, but I can get you into a lender if you want to find out more.

Are prices going to continue to go down?  I don't know.  Are interest rates going to rise?  I don't know that either.  Buying a home is a personal decision and you can only make the decision based on your circumstances and the information that is available to you. 

If you are going to want to sell your home in two years, then buying now may not be the right choice for you - your home may lose value in those two years and even if you don't you will have cost of sale to consider.  But, if you plan to live in it for the long haul, you likely won't notice a further dip.  Furthermore, if interest rates go up it won't matter that prices are so low.  Your buying power will be different.  I'm not trying to sell you.  I'm just giving you the facts.  You make your own decisions.

But it's something to think about.  It won't be this way forever.  The combo of low prices and low interest rates is pretty hard to beat.

 

Sincerely,

Kasey

 

Kasey & John Boles 

Jon Gosche Real Estate, Boise Idaho 

kaseyboles@boiserealtystore.com / johnboles@boiserealtystore.com

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