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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.
I am in the business of learning, and when you are buying a home, learning what the "perfect" beach dream home looks like to you is the starting point for finding it. When you are selling your family's home, hearing about what you have enjoyed while you lived there helps me find the next happy owners. It is a new frontier with targeting your message these days. Digital Platforms allow marketing to a targeted homebuyer who is looking for your home! As a Realtor, I use the North East Florida Association of Realtors MLS, and the many platforms included with it. Also used is Social Media, Digital Advertising, as well as good ole Print, Open Houses, and Signage in front of your house. Thinking about buying or selling? I am ready to hear what you have to say. Call Anytime. 904-699-4991