According to Redfin, a national real estate brokerage, there's a pretty good chance you can find a condo or co-op that'll cost you less to own per month than it would to rent one!
Landlords have every right to get as much for their rental as possible. If there are renters who are ready, willing, and able to pay them what they're getting per month, then the market has spoken, and that is ultimately what defines and creates the market value.
The good news is, you might be able to buy your own home and pay less per month than you do in rent!
People often presume that buying a home will cost them more than renting. It certainly can, but it doesn't always. A lot depends upon:
It's not a no-brainer. You have to look into those things. But most likely you won't be able to buy just any house on the market and have it cost you less per month than something you could rent in the area. That's not how it works. For instance, you're probably not going to be able to buy a 4-bedroom, 3-bath colonial on a cul de sac for less than it costs you to rent a 2-bedroom, 1-bath apartment. But, you might be able to find a 2 bedroom, 1 bath condo or co-op that'll cost you less per month than that apartment!
In fact, according to recent monthly rental market data from Redfin, there's a pretty good chance you can find a condo or co-op that'll cost you less to own per month than it would to rent one! While other types of property cost more per month to own than to rent, condos and co-ops are about $200 cheaper per month to own on average on a national level. And that's not just right now; it has been cheaper to own a condo — by even more than that at times — going back to at least April of 2019.
Again, real estate values and markets function on a local level, so you can't entirely bank on national statistics. But they're at least a good indication that there are possibilities worth looking into if your rent is creeping higher, and you'd like to have some control over how much you're shelling out every month for a place to live! In the least, it's worth asking your local real estate agent to help you figure out if there are condos (or perhaps even another type of home) for you to buy, that'll cost you less per month than your current rent.
If you're feeling like rent prices are skyrocketing, you're not imagining things. While they're driven by supply and demand in the market, some landlords are also using software that helps them not only determine how much they can get for rent, but also encourages them to avoid bargaining with renters and to be firm on higher monthly rental rates.
The good news is that you might be able to buy your own condo or co-op, and pay less per month than you would in rent, based upon national rental market data. Reach out to your local real estate agent for a more accurate assessment of the options and possibilities in your area. With offices in Charlottesville, Madison, Amherst, Orange & Culpeper, our Montague Miller & Co real estate professionals can help you with your home search!
Resources: Keeping Current Matters
It took a lot of dedicated effort to get your home on the market. It would be nice if you could just sit back and wait for the offers to roll in. Unfortunately, it's not that easy.
Once your home is on the market, your real estate agent will work hard to complete the sale, but you'll have to do your part to keep things moving forward. Here are five things you can do to help keep your marketing efforts on track.
Your work isn't done until the sale is finalized. With these tips, you can ensure everything goes right with your home sale.
When you're selling your home, first impressions are everything. Typically, each home buyer is looking for something different in the house they buy. However, there are common problems that will make them walk — and, maybe, even run — out of your home if they see them. The good news is there are several things you can do to make buyers fall in love with your home.
With these tactics and fixes, there's no doubt buyers will fall in love with your home. Ask your trusted Montague Miller real estate agent for more tips on how to get the most out of your sale.
If you're planning to sell your home, consider staging it. From decluttering and cleaning to rearranging and styling, successful home staging can make you money. In fact, according to the National Association of REALTORS®, most sellers' agents agree a well-staged home increases the dollar amount home buyers offer.
If you are an HGTV fan, you know home staging is when the "pros" go through a home clearing out the clutter, highlighting its strengths, and presenting each room in the best light that will attract the largest group of potential home buyers.
But, do you need to hire a professional stager? Maybe not. Use these six tips to manage the styling and upgrading of your home to fetch a higher sales price.
In a competitive market or in a situation where you need to sell your home quickly, staging is the key. Keep these tips in mind, and don't be afraid to talk to a professional stager. Often, the cost of professional staging is made back with a higher sales price and less time on the market!
Deciding whether to jump into the housing market or rent instead is rarely an easy decision – especially if you're a first-time homebuyer. But in today's whirlwind market, you may find it particularly challenging to pinpoint the best time to start exploring homeownership.
A real estate boom during the pandemic pushed home prices to an all-time high.1 Add higher mortgage rates to the mix, and some would-be buyers are wondering if they should wait to see if prices or rates come down.
But is renting a better alternative? Rents have also soared along with inflation – and are likely to continue climbing due to a persistent housing shortage.2 And while homebuyers can lock in a set mortgage payment, renters are at the mercy of these rising costs for the foreseeable future.
So, what's the better choice for you? There's a lot to consider when it comes to buying versus renting. Luckily, you don't have to do it alone. Reach out to schedule a free consultation and we'll help walk you through your options. You may also find it helpful to ask yourself the following questions:
1. How long do I plan to stay in the home?
You'll get the most financial benefit from a home purchase if you own the property for at least five years.3 If you plan to sell in a shorter period of time, a home purchase may not be the best choice for you.
There are costs associated with buying and selling a home, and it may take time for the property's value to rise enough to offset those expenditures.
Even though housing markets can shift from one year to the next, you'll typically find that a home's value will ride out a market's ups and downs and appreciate with time.4 The longer you own a property, the more you are likely to benefit from its appreciation.
Once you've found a community that you'd like to stay in for several years, then buying over renting can really pay off. You'll not only benefit from appreciation, but you'll also build equity as you pay down your mortgage – and you'll have more security and stability overall.
Also important: If you plan to stay in the home for the life of the mortgage, there will come a time when you no longer have to make those payments. As a result, your housing costs will drop dramatically, while your equity (and net worth) continue to grow.
2. Is it a better value to buy or rent in my area?
If you know you plan to stay put for at least five years, you should consider whether buying or renting is the better bargain in your area.
One helpful tool for evaluating your options is a neighborhood's price-to-rent ratio: just divide the median home price by the median yearly rent price. The higher the price-to-rent ratio is, the more expensive it is to buy compared to rent.5 Keep in mind, though, that this equation provides only a snapshot of where the market stands today. As such, it may not accurately account for the full impact of rising home values and rent increases over the long term.
According to the National Association of Realtors, a typical U.S. homeowner who purchased a single-family existing home 10 years ago would have gained roughly $225,000 in equity — all while maintaining a steady mortgage payment.6
In contrast, someone who chose to rent for the past 10 years would have not only missed out on those equity gains, but they would have also seen U.S. rental prices increase by around 66%.7
So even if renting seems like a better bargain today, buying could be the better long-term financial play.
Ready to compare your options? Then reach out to schedule a free consultation. As local market experts, we can help you interpret the numbers to determine if buying or renting is the better value in your particular neighborhood.
3.Can I afford to be a homeowner?
If you determine that buying a home is the better value, you'll want to evaluate your financial readiness.
Start by examining how much you have in savings. After committing a down payment and closing costs, will you still have enough money left over for ancillary expenses and emergencies? If not, that's a sign you may be better off waiting until you've built a larger rainy-day fund.
Then consider how your monthly budget will be impacted. Remember, your monthly mortgage payment won't be your only expense going forward. You may also need to factor in property taxes, insurance, association fees, maintenance, and repairs.
Still, you could find that the monthly cost of homeownership is comparable to renting, especially if you make a sizable down payment. Landlords often pass the extra costs of homeowning onto tenants, so it's not always the cheaper option.
Plus, even though you'll be in charge of financing your home's upkeep if you buy, you'll also be the one who stands to benefit from the fruits of your investment. Every major upgrade, for example, not only makes your home a nicer place to live; it also helps boost your home's market value.
If you want to buy a home but aren't sure you can afford it, give us a call to discuss your goals and budget. We can give you a realistic assessment of your options and help you determine if your homeownership dreams are within reach.
4. Can I qualify for a mortgage?
If you're prepared to handle the costs of homeownership, you'll next want to look into how likely you are to get approved for a mortgage.
Every lender will have its own criteria. But, in general, you can expect a creditor to scrutinize your job stability, credit history, and savings to make sure you can handle a monthly mortgage payment.
For example, lenders like to see evidence that your income is stable and predictable. So if you're self-employed, you may need to provide additional documentation proving that your earnings are dependable. A lender will also compare your monthly debt payments to your income to make sure you aren't at risk of becoming financially overextended.
In addition, a lender will check your credit report to verify that you have a history of on-time payments and can be trusted to pay your bills. Generally, the higher your credit score, the better your odds of securing a competitive rate.
Whatever your circumstances, it's always a good idea to get preapproved for a mortgage before you start house hunting. Let us know if you're interested, and we'll give you a referral to a loan officer or mortgage broker who can help.
5. How would owning a home change my life?
Before you begin the preapproval process, however, it's important to consider how homeownership would affect your life, aside from the long-term financial gains.
In general, you should be prepared to invest more time and energy in owning a home than you do renting one. There can be a fair amount of upkeep involved, especially if you buy a fixer-upper or overcommit yourself to a lot of DIY projects. If you've only lived in an apartment, for example, you could be surprised by the amount of time you spend maintaining a lawn.
On the other hand, you might relish the chance to tinker in your very own garden, make HGTV-inspired improvements, or play with your dog in a big backyard. Or, if you're more social, you might enjoy hosting family gatherings or attending block parties with other committed homeowners.
The great thing about owning a home is that you can generally do what you want with it – even if that means painting your walls fiesta red one month and eggplant purple the next!
The choice – like the home – is all yours.
HAVE MORE QUESTIONS? WE'VE GOT ANSWERS
The decision to buy or rent a home is among the most consequential you will make in your lifetime. We can make the process easier by helping you compare your options using real-time local market data. So don't hesitate to reach out for a personalized consultation from our Montague Miller & Co trusted real estate professionals, regardless of where you are in your deliberations. We'd be happy to answer your questions and identify actionable steps you can take now to reach your long-term goals.
The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.