If you’re currently renting in Orange County and are considering the purchase of a home, below are four things that you should take into consideration:
- Rent’s are on the rise – with the severe housing shortage. As the chart illustrates, rents have been increasing with two bedrooms accelerating the most with September showing a 14.4% year-over-year increase nationwide based on data from Realtor.com
- Homeownership builds wealth – this year, renters missed out on a substantial increase in equity based on home price gains. A 20% increase in home values based on a loan-to-value of 80%, means your 20% investment gained 100% in value this year ($200K down on a $1 million property that is now worth $1.2M based on 20% increase in value means your equity or wealth has doubled in your home and is now worth $400K). This is the beauty of leveraged or financed investments.
- Homeowner’s can customize their home – when you own, you can customize your home to whatever your heart desires.
- Owning your home does not mean you can’t be as mobile – with how quickly homes are selling and the forseeable housing shortage for the next couple of years, there should be ample demand for your home to sell at a relatively quick pace (not as much as 2021 though).
- Tax deductions of homeownership means you can afford more than your monthly rent payment – $3,000 rent payment may equate to the same as a $3,700-$3,900 mortgage payment based on standard deduction versus itemized when you own your home due to the deductibility of property taxes, interest, etc.
Contact us for a more in depth analysis and discussion of your rent versus buy scenario.
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