Rent Prices on the Rise
April 1, 2019 by Marty Orefice | Real Estate
Trending today on LinkedIn: “the rent is too damn high.” This issue is not just trending in the United States but at a global level.
People are moving away from the suburbs to the cities where the big jobs are at all around the world.
When rent keeps going up and eating up our extra income, less and less keeps ending up in the savings account. You become further and further away from your goals.
How do you fix this? How can we avoid getting stuck in the ever-rising costs of renting?
Split the difference.
Renting to own is literally straddling the worlds of renting and buying and squeezing your legs together until you can make the jump into homeownership.
Is now the time to rent to own?
With rent costs rising, you’re probably thinking it’s not the best time for this, but rent prices are always rising. When people are paying more to purchase properties, they want to rent those properties for more to recoup their costs.
When the market crashes, there are a lot of people demanding places to rent as they don’t have the money to buy. That demand increases the cost of rental prices.
There’s no GOOD time to start saving for homeownership, at least not in the future. The best time to start saving for homeownership and building a plan is now.
Consider setting up a rent to own deal with the seller of a home you’re interested or, even, your current landlord. Build into your contracts easy ways for you to save up money like rent credits.
Once you’ve got a set price value on the home, work to increase its value – which will also increase your equity. If you bring the house’s value up $2,000, you build $2,000 worth of equity in the home.
It’s not just about saving money for the home, it’s making the home an amazing investment for you and the bank that you’re financing through.
But can’t monthly expenses go up when you own?
While there are still variables associated with homeownership, they’re not as extreme as they are with rent prices, and at the very least, they’re somewhat predictable.
If you live in a condominium or a neighborhood with an HOA, your HOA prices will likely rise while you live there…but that would have been the case if you were renting too as the owner would have likely transferred these costs to you with yearly rent increases. More so, as an owner, you get a vote on whether to increase those prices (if you show up), whereas, renters don’t get a say at all.
After that, you’ve still got taxes to worry about, which consistently rise every year, but there are deductions you can make from them as you’ve owned the home long enough to declare homestead exemption, etc.