Throwing money away every month on a Rental Home?

By
Real Estate Agent with Sandstone Real Estate Group

Many people living in Conway, AR rent their homes. I have always asked them why do you just throw money away? The answer I get time and time again is, "I can't afford a house, or I don't want to spend that much money a month, or I am waiting on the INTEREST rates to go down further!" HELLO interest rates have no where to go but UP!!

A 3 bedroom, 2 bathroom home in Conway, AR, that is 10 years old, has a market price of around $110,000.00. With a 30 year FHA fixed Rate mortgage at 4.5% interest (taxes, insurance, and PMI included in the payment) would run a home owner around $750.00 a month. HOW MUCH DO YOU PAY IN RENT EVERY MONTH? And let me tell you friends we have a few houses out there on the market that would probably go for a little less than that. We need you to buy houses to help stimulate the economy!

Benefits of owning your own home:

1. You can deduct the interest and property taxes on your tax return.                                        

2. There is no annual increase in your Fixed Rate Mortgage payment, there might be a 3% increase annually for a lease.

3. Real Estate historically tends to appreciate, So over the next 5-10 years your home will gain value.

4. FREEDOM... Yes Freedom there is no landlord bothering you, or telling you what you can and can't do in Your Home...

 

Renting a home in Conway, AR you will get a 3 bedroom, 2 bathroom, and 1200 square foot rental for around $800.00 a month. Benefits of renting: not responsible for fixing things, you can move on short notice.... Those are about the only benefits! Downfalls of Renting: RULES, You're paying someone's mortgage for you to live there, there are no tax breaks, etc....

So let's do some simple math!

Renting a home....

$800.00 a month x 12 months x 5 years = $48000.00

And that is you paying someone else's mortgage!! That is a lot of money you will never see again.

Buying a Home....

$750.00 a month x 12 months x 5 years = $45000.00 now I am not going to lie.... That is also a lot of money!! But remember the benefits of you owning a home? Tax deductions on the interest and property taxes each year!!! Also in that time frame you have paid down your home by $5000-7000. So it is not a complete waste of money, you are building equity in your home.

Now I have a friend who told me she wasn't ready to buy for 4 years, that friend of mine missed out on the $8000 tax credit..... But they eventually did buy a home a few months ago. Here is what they said about the whole thing.

Reasons for moving:

I truly wanted a place that was mine and that I could customize how I wanted. I couldn't hang pictures, paint the walls or even own a pet.  Now that I'm in my own home I have the dog I always wanted, and I able to paint my house the colors that I like. When searching for a house to rent, I found it would be a lot cheaper just to take the plunge and purchase my own house.  Instead of handing over thousands of dollars a year to the landlord to pay his mortgage, I went out and got my own mortgage for a lot less than what I was paying in rent. Ultimately I wish I would have made the decision sooner but, I think it worked out for the best. I have a great home now with my very own puppy!

Satisfied Home Owner

If you have any questions about the Local Real estate market please feel free ask them at

Your Exit Realtor of Central Arkansas- Blake Roussel Realtor

Buying and Selling a home is a huge Financial decision, Blake Roussel with Exit Natural State Realty is your Real Estate Professional for Conway, Little Rock, Maumelle, Benton, Bryant, Jacksonville, Cabot, and Searcy, Arkansas. My goal is to walk you through each step of the buying or selling of your home, so that we have a smooth transaction.  Call Us today 501-230-6082. Customer Satisfaction is our #1 GOAL, we are here to serve you throughout this process. Check out what my past clients have said about our Customer Service. We look forward to hearing from you.

"Then Difference between FOR SALE and SOLD"

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Buying and Selling a home is a huge Financial decision, Blake Roussel with Sandstone Real Estate Group is your Real Estate Professional for Conway, Little Rock, Maumelle, Benton, Bryant, Jacksonville, Cabot, and Searcy, Arkansas. My goal is to walk you through each step of the buying or selling of your home, so that we have a smooth transaction.  Call Us today 501-230-6082. Customer Satisfaction is our #1 GOAL, we are here to serve you throughout this process. Check out what my past clients have said about my Past Clients have said about my services. We look forward to hearing from you.

“Then Difference between FOR SALE and SOLD”

Comments (3)

Joanne Louise Stevens
Keller Williams Realty Los Angeles-Brentwood - Los Angeles, CA
Realtor - Serving Brentwood and Surrounding Cities

Good afternoon:

Many people who can afford to buy a home, but prefer to rent usually are afraid to commit to home ownership.  Most people don't understand the home buying process and they FEAR (False Evidence Appears Real), crossing over.  Try having home buying seminars in your community and see if you get an increase interest from eligible prospects.  I have the same problem in my area.  There are many people who are renting and desire to own their home.  Getting them to view properties is rather challenging.  They are waiting for the right moment is usually their response.

Great post!

Have a prosperous week.

 

Jun 22, 2011 09:44 AM
Anonymous
Anonymous

What if I filed bankruptcy a couple of years ago and have no down payment? How do I buy a house versus renting? (I'm posting anon. because I am embarrassed.) If you could answer me this question here... I just don't see how I could buy.

 

Jun 22, 2011 10:11 AM
#2
Blake Roussel
Sandstone Real Estate Group - Conway, AR

Bankruptcy affects your credit for a short time period (3-5 years). You could try using a credit repair specialist to speed up the process. Don't be embarrassed at all, I promise you that a lot of people reading this are in the same position. Sometimes we just have to do what has to be done to have a chance of making things better. If you are located in the Central Arkansas area and would like to sit down over coffee and discuss some things that might help i would be glad to help in any way. Your conversations with me will remain completely confidential. go to the contact me page at www.yourexitrealtor.com if you want to email me personally. good luck and i hope to hear from you soon.

Blake Roussel
YourExitRealtor

Jun 22, 2011 10:47 AM