Don’t Get Caught in the Rental Trap!

rents skyrocketRental rates in southwest Florida continue to rise although the summer months have allowed the rates to stabilize somewhat.  As our seasonal guests start to think about our wonderful weather and their winter vacations, I worry that our service industry will not be here to help them.  Naples is a service community; we are here to service the rich, we have no industry or manufacturing to support us.  As rental rates rise our service people have to move further and further from their jobs to find affordable housing.  Had you considered you might be able to afford to buy?  Check out this article and then give me a call.  Let’s review your income and expenses and see whether we can get you qualified for a mortgage that will not increase in payments in the next 30 years.  That is much safer than paying rent every month!

Reprinted courtesy of Keeping Current Matters August 2016

There are many benefits to homeownership. One of the top ones is being able to protect yourself from rising rents and lock in your housing cost for the life of your mortgage.

Don’t Become Trapped

Jonathan Smoke, Chief Economist at realtor.com, reported on what he calls a “Rental Affordability Crisis.” He warns that,

“Low rental vacancies and a lack of new rental construction are pushing up rents, and we expect that they’ll outpace home price appreciation in the year ahead.”

In the Joint Center for Housing Studies at Harvard University’s 2015 Report on Rental Housing, they paying a mortgagereported that 49% of rental households are cost-burdened, meaning they spend more than 30% of their income on housing. These households struggle to save for a rainy day and pay other bills, such as food and healthcare.

It’s Cheaper to Buy Than Rent

In Smoke’s article, he went on to say,

“Housing is central to the health and well-being of our country and our local communities. In addition, this (rental affordability) crisis threatens the future value of owned housing, as the burdensome level of rents will trap more aspiring owners into a vicious financial cycle in which they cannot save and build a solid credit record to eventually buy a home.”

 “While more than 85% of markets have burdensome rents today, it’s perplexing that in more than 75% of the counties across the country, it is actually cheaper to buy than rent a home. So why aren’t those unhappy renters choosing to buy?”

Know Your Options

Perhaps you have already saved enough to buy your first home. HousingWire reported that analysts at Nomura believe:

“It’s not that Millennials and other potential homebuyers aren’t qualified in terms of their credit scores or in how much they have saved for their down payment.

 It’s that they think they’re not qualified or they think that they don’t have a big enough down payment.” (emphasis added)

Many first-time homebuyers who believe that they need a large down payment may be holding themselves back from their dream home. As we have reported before, in many areas of the country, a first-time home buyer can save for a 3% down payment in less than two years. You may have already saved enough!

Bottom Line

Don’t get caught in the trap so many renters are currently in. If you are ready and willing to buy a home, find out if you are able. Let’s get together to determine if you could qualify for a mortgage now!

Remember it is always toasty in Naples and you deserve your piece of Naples sunshine and a home of your own.  Stop paying your landlords mortgage and start paying your own!

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