When was the last time you heard that rents were going down? Rental properties are investments and need to not only maintain their holding costs but also need to generate a property for the landlord and investor. Many people in recent years have realized that real estate investments are a great hedge against inflation and both good short-term and long-term investment.
For those that are renting or recently rented, the smaller the property, the greater the percentage increase in rent. A typical studio apartment has experienced an average of a 16.9% increase in the year over the last year. For those renting a home here locally, rental rates have also increased. For example, in the city of Plano, the average rent for a 3 bedroom, 2 bath home is $2,498 compared to last year when the rent was $2,000. That’s an increase of $25%!
One of the major advantages of home ownership is wealth building through the growing equity of a home. Another is in the mortgage interest deduction on your taxes. When you rent, you are not building wealth and you have no interest deduction on your taxes for your housing.
If you have never owned a property, with all the bad news about the economy, you may be reluctant and scared to buy a property even if you have good credit and income, and have savings for a down payment. You don’t need a 20% down payment. In some cases, it can be as low as 3%. In times of uncertainty, the typical instinct is to just continue to stay the course. If that means you continue to rent and just wait, I highly encourage you to explore the facts and remind yourself that the news most often only provides you with one side of a story and not all the facts you deserve to make an informed decision. As a highly experienced Realtor® that has guided buyers for over 18 years, including during the last recession, I invite you to contact me to learn more before renewing your next lease. You will be grateful to know the facts!
