For much of the last decade, purchasing a home to own and live in, rather than rent, has been a sound investment. With home prices affected by the early 2000s crash and record-low mortgage rates, buying a home was not only been cheaper than renting but also a better investment.
The real estate market finally regained its footing after hitting an all-time low in 2012 and has been steadily climbing back up. In the last three years alone, home prices throughout most of the U.S. have skyrocketed and many homes are worth more now than they were back in 2006 during the height of the housing boom. This is making home buying less affordable now and fewer people are able to get into the market at this stage. But economists believe that this a telltale sign of an impending economic pendulum swing. A recent joint study by real-estate website Zillow and the Pulsenomics research firm stated that 43% of the real-estate economists and experts they surveyed said that the U.S. real estate market should become a buyer’s market in 2020. They estimate this shift will be the result of an increase in housing inventory availability as fewer people are able to afford purchasing a home. As the availability of homes for sale outpaces the current demand, new buyers will have more negotiating power and be able to drive prices down. So what does that mean for you now? Real Property Management, a Stamford real estate management firm, believes that now more than ever, renting is the most cost-efficient housing solution that also offers a prime reinvestment opportunity.
Renting Now + Investing = Wealth Building
As interest rates and home prices continue to grow exponentially, the cost of renting versus home buying becomes increasingly attractive. According to Realtor, the monthly costs associated with buying and owning a home have increased by 14 percent since last year, while the average rent rate increase was a mere 4 percent as compared to 2017. If you were to take your savings from renting and reinvested that money in something like mutual funds or high-yield savings, on average, you would see a long term return on your investment that could outperform anything you would earn from owning and building equity in a home. This is illustrated in a joint study between London Business School and Credit Suisse that found that housing offered returns around 1.3 percent per year from 1900 to 2011, after adjusting for inflation. By contrast, the average annualized total return for the S&P 500 index over the past 90 years has been around 9.8 percent. Taking advantage of the affordable rent rates and investing the money you save during your rental years could yield incredible dividends for your larger financial goals.
Renting Towards Your Goals
Contrary to popular belief, renting is not throwing money away. Our Stamford real estate management team at Real Property Management firmly believes that renting can be a great way to save and work toward other financial goals without the financial obligations associated with homeownership. However, if you do have your heart set on buying a home sooner rather than later, Real Property Management, the real estate management Stamford, CT, landlords have trusted for more than 25 years, suggests several ways you can work toward your goal of home ownership while making the most of your time and money while renting.
- Practice paying a mortgage. Design your budget as if you are paying a mortgage every month and set aside the difference between that “mortgage” and the cost of your rent to put towards building a down payment or investments.
- Contact your landlord or property management company and see if they offer credit reporting to any of the three major credit agencies. If they do submit your on-time rent payment history to a credit agency, this could work to help build or bolster good credit, which you will need to qualify for lower interest rates when applying for a mortgage.
- Get an idea of what maintenance cost could be for you as a homeowner by talking to your landlord. Landlords know all to well the cost of managing a property. It’s something new homeowners can sometimes overlook in their excitement of getting a home. Landlords who partner with our Stamford real estate management team at Real Property Management receive detailed accounting reports they can review and know exactly how much of their operating budget is allocated for maintenance costs.
Take advantage of the valuable time you have as a renter and make your money work for you by reinvesting and building wealth that will help you achieve your future financial goals.
The Benefits of Renting with our Stamford Real Estate Management Team
If you are looking for a place to call home while you work toward your larger financial goals, then you should contact Real Property Management, the real estate management Stamford, CT, firm that renters have come to love. We work with clients like you to show them the right rental property to fit their lifestyle and budget. We will walk you through the leasing process and help you get situated in your new home. We offer a 24/7 emergency maintenance hotline with a friendly customer service team to help our renters with all their maintenance needs. You no longer have to hunt down your landlord to take care of any issue that may arise in your rental. With our seasonal maintenance inspections, we make sure your rental home is in tip-top shape throughout the year. Plus, our online payment system makes it easy for you to pay your rent on-time, every time. All of this is possible because of our incredible nationwide network. Everything you need to be a successful renter while working toward your future goals is in the palm of your hand with Real Property Management, the most trusted Stamford real estate management firm in the region. Call us today!