Are you still renting? Let me show you why you should stop. We have talked about in other posts about building wealth through buying real estate and when you rent you are paying your landlord and his mortgage. Well if that didn’t get you excited about buying a home, maybe this will scare you into it.
Yardi Matrix just finished their monthly report on rent prices. They look at over 100 cities all over the country to determine how rents are changing. Well, we just hit our record high. Great news for landlords, not so great for tenants. Rents have gone up about 6.5 percent year over year in July to hit an average of $1,155. They even went up $5 since June!
Side note, a $1,155 monthly payment – including principle, interest, taxes, and insurance – is like buying a home for $187,500 with no down payment. Look what kind of homes you could get for under $187,500. This assumes that you don’t have a down payment (see down payment assistance programs), you pay 1.3% in taxes and insurance (a conservative number), and get a 4.5% interest rate (do-able) with no other mortgage insurance.
As you can see this is the time to stop renting and search for a home to buy. On the flip side, if you own a home, it is a great time to buy a rental home. You can either go find a nice rental property or rent your current home and move into a new one.