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You’ll often hear it stated that paying rent is throwing money down the drain. As a motivation to buy a home, however, that might not be the best idea. A rule of thumb is that if you can purchase a home for fifteen times what you currently pay annually in rent, buying makes sense. In real numbers, if your rent is $1,500 a month, your annual rent is $18,000. Fifteen times that amount is $270,000. That means if you can buy a comparable home for around $270,000, it makes sense to buy rather than to rent because you’ll break even in 15 years and will accrue equity beyond that.
But even if housing prices fit that scenario, what is your personal criteria?
That depends. There are multiple rent vs. buy calculators online that allow you to plug in the variables that apply to your situation. The adage that it’s always better to buy may not fit into your lifestyle, career goals or plans. Don’t buy just because someone tells you that you’re tossing away your life savings. After all, if you have enough for a down payment, you can invest it in something more liquid than property.
But, buying is a fantastic idea if you love the community, see yourself living there for at least five years, and want to own your home.
There are some guidelines, however, to help you determine if you are ready. These require that you keep financial considerations separate.
The other questions you want to answer are: How secure is your job? Could you be moving within five years? Do you qualify for a good interest rate? Buying just to escape renting is never a promising idea. But if the answer to these questions leads you to believe homeownership is right for you, in the right location, and it’s the right time, find the right real estate professional to help you get there.
WELCOME TO RIDGE HILL REALTY
This is the place where you will find everything you need to know about Ridge Hill Real Estate. Please use my website to assist you in searching all available listings in this area, including my Feature Homes. This web site has been designed to help you find the information you need to make informed decisions as you buy or sell a property. In addition, it is my goal to be responsive to your enquires in a professional and timely manner. As a proud member of the Most Referred Real Estate Agent network, I will always strive to earn your trust and provide the highest level of service.
If there is any way that I can be of assistance to you personally, please let me know.
Most sincerely,
Bob Syngay