Are You Still Renting?
Guess what! Interest rates are REALLY low. They have been REALLY low for a while, and based on historical data, a) they can’t go much lower, if they go lower at all, and b) that means there is a relative guarantee that they will go up in the future.
So, if you’re renting, and you’re on a month to month, or your lease term is up soon, or the savings would simply justify making the change, you may be surprised to know that at today’s rates, you can buy an $80,000 property and your monthly payments will at about $700.00 / month.
Did you know that as a result of the economic climate over the past few years, millions moved back into their parents homes and are now considering moving out again? That means (considering there are lots of people who are still skiddish about buying) that rental supplies are going to go down and rents are going to go up, as those people move out and rent. That’s basic supply and demand.
How much are you paying? Think your rental rate will stay there? Not likely. CNN Money predicts that rental prices could increase up to 10% annually in some areas.
In some areas of the valley, home prices have fallen to levels that we haven’t seen since the late 90’s. That’s a setback of more than 10 years of growth. What that also means is that you got lucky enough to be growing up in a time when all real estate appreciation essentially was put on hold while you grew up. And as a young professional with a burgeoning career and a bright future ahead of you, thousands of opportunities to build wealth are sitting right in front of you.
Stop! It’s time to start putting your money to work for you instead of giving it to the guy who is doing the same.
A simple illustration:
12 months of rent at $800.00 = $9,600.00. Gone…not deductible from your income, not put into retirement, simply gone.
Purchase an $80,000 home with 20% down on a 15 year note at today’s rates and your monthly payment would be $482.24.
Not including Taxes and Insurance, that’s $5,700/year.