Over the past 25 years I have been selling real estate in my home town in Bend, Oregon. As a resident, real estate and landlord in this area I have come to notice a recent issue in the area. Over the last several months I have been receiving daily calls from people I have never met asking if I have anything available that they can rent. Many of the calls I have received are from people that have been evicted from homes that they have rented for a long time due to the owner/landlord intentions of selling the home.
Renting a home is unstable and can end earlier than planned at no fault of the renter. Today in Bend if a person wants to rent a 3 bedroom 2 bath home it will cost them about $1200 to $1500 per month. At the same time, buying a 3 bedroom 2 bath home in Bend today would cost about $1200 to $1500 per month.
Up front money to rent a home in Bend is usually first last and deposit equaling about $4500 for a home that is $1500 per month. When buying a home under $305,000 the up front money needed with our current loan and grant programs is 0 if you have a good knowledgeable realtor.
Over time renters will have periodic increases in their rent. Over time owners have periodic increases in their taxes and insurance, however usually less. One benefit a renter has is the owner in most cases is responsible for maintenance and renters will pass on those expenses. However, over a ten year period a renter has no equity from the 120 payments made, which is not very good. While over a ten year period a home owner will have paid down at least $15000 creating equity. In essence a renter is paying down the equity for their landlord and helping secure the landlords long term investment and wealth.
A homeowner also will enjoy the benefits of inflation, for instance last year if you owned a home that you purchased for $200,000 you would have easily have gained 10% inflation and had an extra $20,000 in equity. While a renter may suffer from issues of inflation and notice that their rent prices are only scooting upwards.
Over time owning a home builds wealth from building equity. Over time renting a home will leave the renter with no equity and no money. If you are thinking about taking the leap from renting to home ownership then feel free to contact me, I would be happy to help guide you through the home buying process.