RENT VS. BUYING

By Steve Hirsch
Geoffrey Stevens Realty

Mortgage payments often are less than rent payments, but there are other things that may prohibit your being able to purchase a house for a while. If owning your own home is important to you, consider sacrificing in the meantime by looking for a place you can rent fairly cheaply in order to save for your future home.

Which person got better use of their money? My bets are on the homeowner because of their sheer tax deduction alone. Buying a house and using a mortgage in Sonoma County to do it for property appreciation should be an afterthought. Buying a home as a place to enjoy, raise a family, enjoy a tax benefit as well as a lower cost of renting are terrific reasons to get a mortgage in Sonoma County to purchase Sonoma County Real Estate.

The final comparison reveals that after 10 years renting versus buying in the above referenced scenario is that the homeowner will be $70,891 wealthier. Those are some significant numbers. Another benefit of getting a mortgage in Sonoma County is that a mortgage loan will dramatically impact the borrower's credit score in a positive way. Renting a house has no bearing on your credit worthiness when seeking new credit.

The other thing we haven't even touched on is that mortgage interest rates are presently at their historic lows. As long as rates on mortgages in Sonoma County remain under 5% affordability will stay with us. Interest rates on mortgages in Sonoma County have risen in the last few months which impacts purchasing power to purchase a property with the lowest possible payment and the highest purchase price.

Our View ? There is a growing disparity between mortgage payments and rentals achievable as rents failed to keep pace with property prices. Falling rental yields has impacted BTL landlords with increasing inability to cover the mortgage payments making them unwilling to invest. The property crash substantially readdressed that issue. In addition, a new approach to negotiate below the market value and work in areas of high rental yields has enabled investors to make excellent returns!
If people live in a place where houses are reasonable this may not be an issue, but with the cost of California mortgage rates it is often cheaper to rent an apartment if you have a roommate. My sister and I only pay about a thousand dollars per month and our unit has a washer and dryer, dishwasher, and little patio, so we have a home like setting and do not have to pay a large house payment. If you buy a new house and you have to pay for new appliances or repair bills this can become expensive.
Also, if your home need extensive repairs then a large amount of money and time will be invested in making this house look beautiful.

Our unit has had its issues such as a running toilet and a washer that overfloaded, but the apartment maintainance team came and fixed these issues free of charge.

When a home owner's washing machine exploads it may cost near two thousand dollars to have special fans brough in to dry the carpet, but we did not have to pay this rental fee since we lived in an apartment complex. I am not putting down home ownership, I am just saying their are perks to renting and it actually can be cheaper if you move quite often and it certain locations such as southern California. Also, I am glad I do not have to pay for those frequent maintainance repairs that home owners will have to take a care of on their own.