Realtor Mag just came out with an article with the Top 10 reasons why renters don’t plan to buy in the future. Some of them make sense, but some others are just misinformation.
Here are the reasons and my comments on them.
- Cannot afford the purchase or upkeep of a home. Buy a LOFT and most of the upkeep will be handled by the HOA. Also you will have a good idea of the costs, since you will know how much the HOA dues are before you buy.
- Not good enough credit for a mortgage. You will be surprised, lenders are more flexible now, but you might get a higher interest rate.
- Not a good time economically to buy a home. The economy is doing great, prices did go up a lot, but interest rates are at a all time low.
- Cheaper per month to rent than to buy. Sometimes. In LA rent prices skyrocketed, so it depends on the area.
- Don’t want to be concerned with doing the upkeep. Again, but a LOFT and your upkeep will be minimal.
- Don’t plan to be in a certain area for an extended period of time. Thats a good reason, since it costs around 7% to sell.
- Rather use the money for other investments than a Loft. Real Estate is one of the safest investments out there, you can live in it, you can rent, you can upgrade and you can borrow money against it. Not too many investments can do that.
- Process of buying a home seems too complicated. Thats why you can get a good Real Estate agent to guide you thru the process.
- Purchasing a home limits flexibility in future choices. Depends on your choices, but yes, it ties you up a bit. Its a longer term choice.
- Can live in better neighborhood by renting. Not true, the better neighborhoods are the ones with owner occupied houses and condos, since they have more vested interest in keeping the area desirable. Again, with exception of the Down payment the numbers are very close.