My med center apartment was leased at 900 a month in April of last year.. in October the rate was nearing 1300. Now i'm having to renew for 1000 for the exact same, unchanged, unimproved, unaltered crap i've been living in. Home ownership can't get here fast enough.
i'm all for buying a house if you can afford it but i think those preaching it are overlooking alot of factors. there's maintenance (which costs time and money), property taxes (i guess renters are paying some of this too), school taxes (even if you don't have kids). now that new $900 house note does not include utilities or cable. and as reggietodd said, you don't always come out with a profit when you sale when you take all that into consideration. and i'm sure alot of those who say buy a house to make your money work for you also have brand new car notes. how does that money work for you?
What did you do, get an interest only loan? You have 4 years of pricipal being paid that you did not subtract. I bought my place for 125k and today its appraised at 170k. In 3 years I have paid the principal down to about 110k. Thats 60k profit if I sold today.
No I have it paid down to $125k. I didn't put anything down. I just used that as an example because most people say "i bought my house for 150k and sold it 3 years later for 200k... etc etc, usually people say it in those tems when talking about how great of an investment a house is.
The thing that sucks the worst for me is the interest I have to pay on my 30 year mortgage. I got a great rate at a little under 6% but they make you pay a lot of it early on in the mortgage. I pay $750 a month and in over 2 years have only lowered my principal $5000.
yep. I'm in the same boat. I got a good rate. I guess you have to own the house for more than 10 years to start seeing the benefits.
You people who think buying is always better than renting have been duped by the marketing propaganda of home builders. Ask anybody who owned property in Houston in the mid 80s whether buying is always better. Buying is a leveraged investment (that means a lot of debt for you financial amateurs...) and if home prices decline (which most people are predicting), you're left holding the bag and out a whole lot of money.
First off, a $130k house is only $800 a month not including PITI, if you use 6.25% interest. Include those things and you might be at $1200-1300 total payment. Using $1250 as an average you're down to $75k over 5 years. Minus the $30k profit you're down to $45k lost over 5 years. Already better than renting. And then you're also discounting quite a few other things. A $130k house will likely be around 2500 sq ft versus 800 sq ft for that apartment. You get about $12k a year in tax deductions for your property tax and interest paid. And, by the end of 5 years, you'll have about $8200 in equity in your house and none in the apartment. Subtract having to deal with bad neighbors, bad landlords, and ignoring the fact that you don't seem to have renters insurance, let's just say I'm about $15,000 ahread of you by now. Minus minor repairs in my house, landscaping, and upkeep... I'm still ahead.
I work for an apartment management company and helped with doing the budgets for all the communities. Our rents didn't climb much. Maybe $10 or $20 per unit. We did expect our occupancy to get much better though. That said, we run B properties whereas, from the rents quoted here, it sounds like most apartment-dwelling posters live in A-grade apartments. Though I haven't really studied the market or anything, my guess would be that Katrina has had a much larger effect on the B and C properties and keeping their occupancies up than it does on prices in the A niche. Occupancies in lower-grade apartments has been dropping as new construction A apartments force them to obsolescence. Katrina has kept them alive a while longer. Unless this is only a short-term effect, I would think it would have a countervailing effect of keeping prices down because low-grade apartments won't go out of business, which would reduce the number of units in the market. Meanwhile previously-rough inner-city areas like Midtown (ahem, Fourth Ward) are gentrifying quickly. I would think gentrification has a much larger effect on the rents in the area. And, I'm surprised the Med Center ever had an apartment for $900 a month. Don't the doctors run the prices thru the roof?
Buying is not always better than renting. However, to choose one of the worse times in history for real estate is so misleading. Why don't you ask anyone who's bought a house in the last 15 years? And to say if home prices decline you'll be left holding the bag is also very deceiving. A price decline has absolutely no affect on me whatsoever unless I'm planning on selling the house or renting it out. Whether a house increases in price or goes down, my monthly payment is the same. So how does that affect me in any way other than lower my property taxes?
You have to remember the neighbordhood around the Medical center. While prices have gone up tremendously recently and plenty of condos built or renovated, there are plenty of B and C class apartments around that area. Still a good place to rent considering all the medical, dental, and nursing students you can rent out to.
Right - If you live in the house for a long period of time and don't plan on selling it, then buying does have many advantages over renting. I was just making that point that there can be disadvantages to buying and home builders do not address those points in their one-sided marketing information.
Mine is around $890 per month, plus mly taxes, home owners insurance, etc.. puts it right around 1400 per month. Thats my house payment every month. When I lived in an apartment it was about 750 per month total. I'm not complaining, I love my house, but I don't view it as some great investment as some people say. It is a decent investment IMO, but not great.
I guess that's true. I know a med student who lived there and her place was no great shakes. Though I live nearby, I don't really see what's going on with the development in that area.
buying a home was great investment five years ago. I'm not so sure today but the housing market has been chugging along, no doubt.
I agree. Buying is not always the right course. But if anyone is buying a house based off of marketing brochures, well then....
I sold my last Townhome and am now doing what I used to detest: RENTING!!!!!!!! Of course i'm waiting like a bird of prey for a good piece of land to build myself a sweet house. I'll be patient for a year or two until I find a nice deal, then I'll build my ultra modern dream house!
