Re: Why Buy when you can rent???
back2basicz
4/7/2011 3:13:13 PM
Scott,
I am unfamiliar with the metrics of Rent to Own (as well as the Specifics involved in the operation there).
Could you care to enlighten me and the rest of the readers here about it.
Sure could be an interesting concept but the operational details are most relevant.
For instance,what about Flexibility(for the Rentor)-how does that work?
Can he/she leave whenever they chose to?
What if they chose to leave because of Job/health,etc,etc and then come back after a few years??? Does their equity have to start from Zero all over Again???
How does the Owner of the Property Gain from the Transaction?
So many questions-I hope you have the relevant answers.
Thanks
Ashish.
Re: Why Buy when you can rent???
Scott McCaog
4/7/2011 3:02:32 PM
Back to the rent-vs-own topic....
I've advised friends who are in the market for a home to consider acquiring on a rent-to-own situation. If done correctly, it's essentially like buying a "call" option - except you get to live there while waiting for the strike date!
This way, you're protected against another downturn, yet may buy at a good price in a few years if that local market soars.
Opinions?
Re: Why Buy when you can rent???
back2basicz
4/6/2011 5:00:15 PM
John,
There is no disputing that real Estate is in the midst of a deflationary cycle here in the US.
And maybe just maybe building in these Green systems you talk about into these properties (alongwith the Federal govt Tax benefits) is the only way to push these properties into the hands of customers faster???
Just a Thought,Just a Thought!!!
Regards
Ashish.
Re: Why Buy when you can rent???
TelecomFreq
4/6/2011 2:40:53 PM
From a home owner perspective, I can say that the cost on many green technologies are coming down, but still might be viewed as to expensive by many home owners.
The other big issue has to do with return on investment. If someone is going to sink 40K into their home to retro fit it with green technology it has to be something that a perspective buyer would be willing to pay for when the house is sold.
Re: Why Buy when you can rent???
John Jordan
4/6/2011 2:34:18 PM
I have written about a project in Yonkers, NY that is successfully using geothermal heating systems and also plans to build a mechancial parking system at its parking garage on a new 417-unit tower it intends to break ground on by year's end.
I think in today's economy, green is in but it depends on just how much it will cost to bring it to market and how much the buyer is willing to spend on it. That also goes for commercial office space. Will landlords be willing to invest in green while office rents are stagnant in many markets or going down?
Re: Why Buy when you can rent???
TelecomFreq
4/6/2011 2:21:52 PM
John,
I am wondering if you think the trend will be towards green building and green technology when the market does turn around?
If so, what technology do you see as having a big impact on future building?
Re: Why Buy when you can rent???
John Jordan
4/6/2011 1:27:45 PM
Thanks for all the comments. I guess the housing market is a hot topic for investors and consumers alike. I believe it is a great time to invest if you are willing to wait for a market turnaround for your return on investment. Rates are low, prices are low. All you need is the capital if the opportunity is right.
The housing market will come back I believe in the next two to three years in most markets. The savvy builders/developers will build smart, build efficently and cater to the needs of today's homebuyers.
In the meantime, rental apartment developers/owners like Avalon Bay Communities, for example, should do quite well during this continued market shakeout.
Re: Why Buy when you can rent???
TelecomFreq
4/6/2011 12:00:34 PM
Ashish,
I do not think a new college grad should be looking to buy their first home right away. Right out of college most new graduates need to focus on developing their careers and getting on their feet. That is not the time to dive into home ownership. But if someone is in a postion where there job is relatively stabel, and they have an income that can support owning a home then i think it is a good idea. And you are correct, right now is a great time to get a fixed rate mortgage.
As for booms and busts, that depends on the person and their career. There are people in each of those bust cities that are still doing very well; a lot of it depends on the industry you are in. To your point, I currently live in Cleveland (one of the cities you mentioned) i just relocated here for work because it was a good move for me, it wouldn't have been if i were a steel worker, but in my field it was a good move, everything is relative.
Re: Why Buy when you can rent???
back2basicz
4/6/2011 11:33:17 AM
Hi,
I don't know how old you really are.But for most youngsters fresh out of college(and with a massive education loan already on their names);they can ill-afford another massive Loan burden as in the case of Housing.
Which is why so many Youngsters (after graduation from college)are moving back in with their Parents today[This can be seen in Fresh Housing numbers quite clearly].
Plus can any youngster really say with any degree of assurance that the Job he has today will be the same one ,he will be in 5 years from now? Or,that the hub of activity which represents his City today will be the same 5 years from now???
Case in Point-Las Vegas or any of the cities all across the Florida panhandle or the rustbelt cities like Cleveland,etc,etc.
Booms can turn to Busts in spectacular fashion anytime.
There is another issue of Interest rates which not many people understand or appreciate today.
If you can afford to lock-up a 30 Year/20 Year fixed rate Mortgage now really is the best time to do it[Thanks essentially to the US Federal Reserve's QE policies;which ensures that Interest rates are low for now].But if you are going to go in on a Floating rate mortgage-It will kill you for sure (2-5 years from now) as the United.States ends up paying much-much higher rates of Interest on its Enormously Heavy Debt pile.
Regards
Ashish.
Re: Is that a Realtor behind those Rose-Colored Glasses?
back2basicz
4/6/2011 11:21:29 AM
Street Smart,
There is another fact about Bubbles.
A bubble which has burst takes a long-long time to blow up again.
Case in Point
1)Japanese Real Estate
2)The Nikkei
3)Gold following it burst in 1982 took all the way till 2003 to blow back up again.
and we can go and on...
So,Don't worry its going to take a while for US Real Estate to enter Bubble territory again.
Regards
Ashish.
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