So many of my former clients are outgrowing their present homes and thinking about moving up to a larger home. Selling the current home isn’t the problem – the inventory of available homes is still suppressed with lots of buyers in the market. We need listings.

The problem is that these folks are also buyers, competing with all the others for the few homes on the market. The question then becomes, should we sell the house and rent until the market cools off?

The answer is: are you crazy? Have you seen what rents are lately? Especially if you rent in what is known as a “transit rich” community — one on the rail line, for instance — rents are almost unaffordable. Last year, Minnesota Housing Partnership said that rents in Minnesota are rising at the fastest rate in 12 years – up 8.5 percent in the last three.

Add to that the fact that 97 percent of Minnesota’s counties don’t have sufficient rental units to meet the needs of area residents and you can see that renting isn’t very cost-effective.

I know what you’re thinking: he’s a real estate agent so of course he wants us to buy instead of rent. But consider this: rents are going up and interest rates are low. This whole buying vs. renting seems like a no-brainer to me, but let’s crunch some numbers.

We’ll have to make some assumptions about the buyer and the mortgage:

• Buyer has a credit score between 700 and 719.
• Buyer has enough cash to put 20 percent down on the purchase.
• The mortgage is fixed for 30 years. Since rates are a moving target, let’s put it at 4.03 percent.

Since I have buying clients right now that are looking to move up or rent, let’s use one of them in the scenario and call them John and Mary.

John and Mary have their eye on a 5-bedroom, 3-bathroom house in Corcoran, listed at $599,900. Rent on the home, based on its 4,800 square feet, would be $3,645 a month. Here’s the basic difference between owning and renting this home:

• Price: $599,900
• Monthly principal and interest: $2,299.
• Monthly taxes: $205.
• Monthly homeowner’s insurance: $92.
• Estimated monthly cost if purchased: $2,596.
• Estimated monthly cost if rented: $3,645.

The tax benefits of owning the home bring that monthly nut down even more. One other thing to think about is that when you own the home you are free to add energy efficient features to it. These not only help save money on the monthly utility bills but the cost of adding the features is tax deductible as well.

Of course this isn’t meant to be an in-depth accounting of the cost of owning vs. renting, but a quick example to show you how, when rates are as low as they are and rents as high as they are, it definitely makes more sense to buy a house than to rent one.

#backlinks-ramsey-spring-lake-park-st-francis-citie#

So many of my former clients are outgrowing their present homes and thinking about moving up to a larger home. Selling the current home isn’t the problem – the inventory of available homes is still suppressed with lots of buyers in the market. We need listings.

The problem is that these folks are also buyers, competing with all the others for the few homes on the market. The question then becomes, should we sell the house and rent until the market cools off?

The answer is: are you crazy? Have you seen what rents are lately? Especially if you rent in what is known as a “transit rich” community — one on the rail line, for instance — rents are almost unaffordable. Last year, Minnesota Housing Partnership said that rents in Minnesota are rising at the fastest rate in 12 years – up 8.5 percent in the last three.

Add to that the fact that 97 percent of Minnesota’s counties don’t have sufficient rental units to meet the needs of area residents and you can see that renting isn’t very cost-effective.

I know what you’re thinking: he’s a real estate agent so of course he wants us to buy instead of rent. But consider this: rents are going up and interest rates are low. This whole buying vs. renting seems like a no-brainer to me, but let’s crunch some numbers.

We’ll have to make some assumptions about the buyer and the mortgage:

• Buyer has a credit score between 700 and 719.
• Buyer has enough cash to put 20 percent down on the purchase.
• The mortgage is fixed for 30 years. Since rates are a moving target, let’s put it at 4.03 percent.

Since I have buying clients right now that are looking to move up or rent, let’s use one of them in the scenario and call them John and Mary.

John and Mary have their eye on a 5-bedroom, 3-bathroom house in Corcoran, listed at $599,900. Rent on the home, based on its 4,800 square feet, would be $3,645 a month. Here’s the basic difference between owning and renting this home:

• Price: $599,900
• Monthly principal and interest: $2,299.
• Monthly taxes: $205.
• Monthly homeowner’s insurance: $92.
• Estimated monthly cost if purchased: $2,596.
• Estimated monthly cost if rented: $3,645.

The tax benefits of owning the home bring that monthly nut down even more. One other thing to think about is that when you own the home you are free to add energy efficient features to it. These not only help save money on the monthly utility bills but the cost of adding the features is tax deductible as well.

Of course this isn’t meant to be an in-depth accounting of the cost of owning vs. renting, but a quick example to show you how, when rates are as low as they are and rents as high as they are, it definitely makes more sense to buy a house than to rent one.

#backlinks-ramsey-spring-lake-park-st-francis-citie#

So many of my former clients are outgrowing their present homes and thinking about moving up to a larger home. Selling the current home isn’t the problem – the inventory of available homes is still suppressed with lots of buyers in the market. We need listings.

The problem is that these folks are also buyers, competing with all the others for the few homes on the market. The question then becomes, should we sell the house and rent until the market cools off?

The answer is: are you crazy? Have you seen what rents are lately? Especially if you rent in what is known as a “transit rich” community — one on the rail line, for instance — rents are almost unaffordable. Last year, Minnesota Housing Partnership said that rents in Minnesota are rising at the fastest rate in 12 years – up 8.5 percent in the last three.

Add to that the fact that 97 percent of Minnesota’s counties don’t have sufficient rental units to meet the needs of area residents and you can see that renting isn’t very cost-effective.

I know what you’re thinking: he’s a real estate agent so of course he wants us to buy instead of rent. But consider this: rents are going up and interest rates are low. This whole buying vs. renting seems like a no-brainer to me, but let’s crunch some numbers.

We’ll have to make some assumptions about the buyer and the mortgage:

• Buyer has a credit score between 700 and 719.
• Buyer has enough cash to put 20 percent down on the purchase.
• The mortgage is fixed for 30 years. Since rates are a moving target, let’s put it at 4.03 percent.

Since I have buying clients right now that are looking to move up or rent, let’s use one of them in the scenario and call them John and Mary.

John and Mary have their eye on a 5-bedroom, 3-bathroom house in Corcoran, listed at $599,900. Rent on the home, based on its 4,800 square feet, would be $3,645 a month. Here’s the basic difference between owning and renting this home:

• Price: $599,900
• Monthly principal and interest: $2,299.
• Monthly taxes: $205.
• Monthly homeowner’s insurance: $92.
• Estimated monthly cost if purchased: $2,596.
• Estimated monthly cost if rented: $3,645.

The tax benefits of owning the home bring that monthly nut down even more. One other thing to think about is that when you own the home you are free to add energy efficient features to it. These not only help save money on the monthly utility bills but the cost of adding the features is tax deductible as well.

Of course this isn’t meant to be an in-depth accounting of the cost of owning vs. renting, but a quick example to show you how, when rates are as low as they are and rents as high as they are, it definitely makes more sense to buy a house than to rent one.

#backlinks-ramsey-spring-lake-park-st-francis-citie#