Why It Is Better To Buy Than To Rent In Todays Market

Dated: 01/16/2016

Views: 250

There are several reasons why this is a great time to be a home buyer. There are several more reasons why it is not a good time to be a renter.

First, FHA loans are easier to get than they have been in a very long time. This is good news if you are looking to buy because FHA loans were the most consumer friendly even before the larger lenders started reducing credit requirements, time after Short Sale/Foreclosure, Loan to Value Ratio’s and other general criteria needed to qualify. In most cases current FHA loans require 3.5% down, a 600 or better credit rating and 1 year proof of income. Short Sale and Foreclosure waiting times are down to 12 months in many cases. With this in mind a home costing $250,000 would cost you approximately $1600 per month for your complete payment including principle, interest, taxes, insurance and PMI.

On the downside, renting the same property would likely cost you $1,800 to $2,000 and you would not get any of the tax benefit of purchasing.

I usually do not like to talk negatively in these posts however there is an increasing and alarming trend in the local and national real estate market of Hedge Fund bulk purchasing for rental purposes. At least 60% of the local properties available for rent in the Palm Beach market currently are owned by Wall Street mega Hedge Funds or large local RIETS. The problem with this is that the companies being retained to manage the properties often lack the infrastructure and skills to properly do so on such a large scale. This results in a poor experience for the Tenant all to often. The benefit of renting as far as no maintenance living is often lost in this translation.

The bottom line is that if you want to purchase rather than rent it is a good time to check your eligibility and make the move.

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