Buying makes "cents" over renting.

The Winchester / Frederick County, VA, rental market has been hot in 2012.  A good property does not stay on the market long.  There are 56 available listed rentals in the $600 - $2000 price range.  On the higher end, there are 29 listings in the $1170 - $2000 price range.  When you look at those numbers, you soon realize that if you can pay $1500 in rent, you can buy a home.

Granted, a home purchase is not for every one.  If there is a chance you will move from the area in the next year or two, a rental might be the solution.  If you've had a short sale or a foreclosure recently, a rental might be the answer for your housing needs.  If you have an unstable job, a rental would be less devastating to your future.  But, if you have a stable job, plan to stay in the area and you don't have a distressed property experience in your immediate past, why not buy?  In some cases, a distressed property will not prevent you from buying.  So, check with your real estate professional.

Let me give you an example of how easy it could be.  Let's say you find a rental for $1161.00 a month.  How would that compare to buying a property?  The chart below shows the difference in economic loss and gains when you buy and when you rent. 

A purchase would give you a $200,000 property.  That would be an easy find in Winchester, VA.  At the going interest rate, let's say your payment would equal your monthly rent of $1161.00 and your profit from equity build up at the end of the year would be $3471.00.  With all of your expenses, you would spend $6195.00 in interest, $1056.00 in property tax, $804.00 in homeowners insurance and $2400.00 in private mortgage insurance.  Wow!  That's a lot of expenses.

Ironically, your rental would cost you $13932.00.  That's a total loss for the year.  The combine non-recoverable expenses on your purchase would be $10455.00.  When all is said and done, you would increase your equity $3471.00 in paid principal and you would save $3477.00 in rent money saved.  There would also be tax savings not included here.

So, if you can buy, you will come out ahead in most cases.  You will need a solid real estate brokerage to help steer you to the best deal you can find.  When you're ready to make that leap into the home-owner's market, call Cornerstone Business Group, Inc.  We will help you save money on your purchase while finding the right home.