Buying Real Estate Why When Where How

Dated: January 5 2016

Views: 172

Answering the 4 basic questions about real estate is simple, it's just not always easy...

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Ain't that the truth!

5 years ago was the best time to buy, of course! Now when is the second best time to buy? RIGHT NOW!

Reason No. 1: Interest Rates = Buying Power

This is one of the most misunderstood concepts in all of real estate, even agents don't fully comprehend the luxury of the ridiculously low interest rates!

Let me simplify this as best I can...  for every 0.5% interest rates go up, you lose the ability to purchase by 4-5%! That means if you qualify for a $250,000 house today and interest rates go up even one HALF of one percent, you will only be able to qualify for a $235,000 house!  

See the table below:Image title

These numbers are skewed even further if you're putting less than 20% down (which most people are)

Reason No. 2 to buy NOW and not wait:

Renting is MORE expensive than buying, both in the long run and the short hall. 

In Pinellas County, a typical single family home with 3 bedrooms, 2 bathrooms, a fenced in yard in an average neighborhood costs about $1200 per month to rent (conservatively). As you can see above in the table, for $1200 per month, you can afford to purchase a $295,000 house getting you not only 3 beds, 2 baths, a nice yard in a great neighborhood, but also giving you a private savings account to store your home's equity rather than giving it away to a landlord! 

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