What do increasing rents really mean for you-and your clients?
Folks that have been around for a while have probably noticed that housing expenses tend to go up over time. This includes rent, so if you’re a renter, pay attention!
Rents in a lot of places have gone up a bunch recently. This is NOT a new phenomenon, and in fact the trend is likely to continue. In the 80s you could rent a 3-bedroom home in my home town for about $600-700 a month. Today a similar home rents for about $4,000 a month. Now, the numbers in your area may be a little different but notice the ratio here. The new figure is around 6 times the old figure.
BTW, the payment to buy that home back in the 80s with was probably around $1,200 a month vs the $650 to rent, so you can see why someone might opt to rent instead of buy.
But If they bought that home instead of renting had since refinanced their loan-instead of paying it off- the payment might be about $725 a month. Vs that $4,000 a month, assuming about 5% rate on a 30-year fixed at a 5% APR which may or may not be available when you view this-not including taxes & insurance.
So maybe you know someone who’s renting now and may not see the benefits of owning a home? Maybe they should take another look?
Granted, my home town in Silicon Valley is a little unique, but inflation is pretty much baked into our economy. They have printed a whole lot of money the last decade or so, and that tends to lead to inflation over time. When you have more of something it’s worth less. Do you see see inflation going away any time soon? I don't. There will be ups & downs for sure, but let’s just say that I wouldn’t be shocked if rents doubled or tripled over the next 20 years, and a little goes along way over an extended period of time. By the way, for you young people, 20 years goes by way faster than you can imagine.
So…I digress…Maybe you know someone who should be look at buying a home now or in the future?
I’ve produced a free guide that tells First Time Home Buyers what they need to know as they prepare to enter the market. It will answer a LOT of questions. It covers how to look, what to look for, mortgage qualification, credit, and more. Get it -for FREE down below. Just let us know where to send it.
Maybe I can help you, and maybe not. I love helping people that love to be helped, but this is just a simple way to get some additional information. We may send an update every once in a while, if that’s OK. But…If you have specific questions that aren’t answered, please let me know!
Leo Linn 800-230-4621
Get your Home Buyers Guide HERE!