Is owning a home still part of the ‘American Dream?’ What to consider before deciding to rent or buy

ByCourtney Carpenter 

Friday, March 22, 2024 8:38AM

HOUSTON, Texas — Owning a home is a part of the “American Dream.” Right? That has at least been engrained in many of our minds.

With high home prices and interest rates, should some of us just give up on that part of the dream?

“I’m a Zillow queen. I’m always on there looking like, ‘OK. Well, what can I afford?'” prospective homeowner Chantel McKinney said.

According to HAR, as of February 2024, the average price of a home in the greater Houston area is $391,080, pricing many people out.

About 60% of Houstonians are renters.

So, should the goal in this day and age even be to own a home?

“I think as a millennial, the American dream of owning a home is kind of faltering when it comes to us,” McKinney explained.

McKinney said she’s saving now, so hopefully, she can afford a home soon. This is exactly what Sarah Mizell, a financial advisor with Cove Wealth Management, suggests.

“A lot of times, people are renting, and they want to buy, and they feel stuck renting, and that is a frustrating feeling. Simply overreaching and buying something doesn’t take that stuck feeling away,” Mizell explained.

Mizell said there are plenty of pros to renting. It buys you flexibility if you do need to move, and you are not on the hook when things break.

If you’re trying to decide whether to keep renting or to buy, here are some of the questions she suggests you ask yourself:

• How much should you spend on a home?
• How much do you have saved?
• How long are you planning to live in the home?

Your housing costs should be around 25% of your income. If you buy, that 25% should include your mortgage, taxes, insurance, any HOA fees, and about 1% to 2% of the cost of your home set aside each year for maintenance.

ABC13 did the math. On the average home here that costs nearly $400,000, you’ll end up spending about $46,000 a year on all of those expenses. That means to afford it, you would need a household income of about $183,000.

That’s of course, after you’ve forked over a lot of money for your down payment and closing costs.

Another important thing you should consider is how long you plan to live in the home. If it is less than three to five years, you’re probably better off renting.

If you don’t have the money yet and it is your dream to own a home, you don’t have to give up on it altogether.

“Get comfortable knowing where your money is going and then make one small tweak every month for the next year that moves you in the direction you want to go,” Mizell explained.

Mizell stresses having a budget, understanding it takes time to save, and making financial decisions that are best for your family, no matter what society says.

https://abc11.com/2024-real-estate-what-to-consider-before-deciding-rent-or-buy-home/14453144

7 Predictions For The 2024 Rental Market

By John Triplett  -December 12, 2023

Here are 7 predictions for where the rental market is headed in 2024 from the economists at Apartment List as the once red-hot rental market of previous years has now cooled.

Here is a key topline summary for 2024:

• 2024 will be the strongest year for new apartment construction in decades, giving renters more options and better opportunities to negotiate price and lease terms.
• “We expect that year-over-year rent growth will crawl out of negative territory next year, but that it won’t rise above the low single-digits.”
• Even though mortgage rates are expected to ease modestly, home prices will remain prohibitively high and continue to create more long-term renters.

No. 1 – 2024 will bring the most new apartments in decades

Construction data from the Census Bureau suggests that multifamily supply growth should remain strong through 2024. The number of new multifamily apartment units under construction hit one million for the first time ever in 2023, and completions are expected to peak in 2024. With so many units in the construction pipeline, 2024 should be the strongest year for new multifamily supply since the 1980s.

No. 2 – Low single-digit rent growth in 2024

2023 is set to have the second slowest rent growth of any year in the history of our estimates (going back to 2017), coming ahead of only 2020. Looking ahead to 2024, “we expect demand to bounce back slightly, but remain on the soft side. The labor market remains fairly strong and there is likely some pent-up demand for new household formation. However, affordability continues to be a major concern and sentiment data shows that Americans still lack confidence in the economy. Even in the most bullish scenario, it’s unlikely that demand will be strong enough to outstrip all of the new supply that we know is coming, likely resulting in our vacancy index rising modestly from its current level in 2024. We expect that rent growth will rise out of negative territory early next year, but that it won’t get above the low single digits in 2024.”

No. 3- The changing rent vs. buy math will create more long-term renters

Many families are remaining renters longer than they may have in the past. Even those who can afford to buy in today’s market may find that renting now actually makes more financial sense. Although most Americans still aspire to own homes, more are now finding themselves renting later in life, and that trend is likely to continue. Consensus expectations are that mortgage rates will ease modestly next year, but likely not enough to significantly alter the prevailing dynamics of the for-sale market. As paths to homeownership fade for many, renting will increasingly be seen as the more practical housing option.

No. 4- Hybrid work will cement itself as the new norm for office jobs

In 2023, the remote work narrative focused on return-to-office plans, but this focus obscures the fact the pendulum will never swing fully back to the pre-pandemic norm. According to the latest estimates, 28 percent of all work days are still from home, and that figure appears to be stabilizing at that level. 42 percent of American workers currently have some form of remote work flexibility, and hybrid arrangements are much more common than fully remote ones. The data shows that hybrid work is here to stay, driving demand for rentals that provide spaces and amenities that blend work and home life for today’s flexible workforce.

No. 5- Sun Belt markets will see more renters, but not necessarily higher rents

The nation’s fastest population growth in recent years has been taking place throughout the Sun Belt. But in many cases, Sun Belt markets have also been among the most accommodating of growth, allowing for new housing development to meet the growing demand. The key takeaway: fast-growing Sun Belt markets will continue to be renter magnets, but rent growth should be kept in check thanks to lots multifamily development.

No. 6- As the economy takes center stage in the presidential election, candidates will need to speak to housing concerns

As we head into a presidential election year, the question of whether the economy is good or bad has proven to be surprisingly complicated. Most of the key indicators of economic health are looking quite strong, but economic sentiment surveys show that confidence and satisfaction in the economy remain weak. It’s likely that at least some of this disconnect is being driven by waning housing affordability. As the election cycle continues to ramp up, candidates on both sides of the aisle will need to articulate housing plans and speak to what has become one of the most pressing concerns of the American electorate. 2024 could be the year where housing rises to the forefront of the political discourse.

No. 7- More renters will use AI in their searches

“We expect 2024 to bring a new wave of AI-powered tools specifically for renters. It will soon become commonplace for renters to use AI in their apartment searches to search, compare, and coordinate actions. It will take time for these advancements to change macro market dynamics, but the next high-demand rental market cycle may look quite different with new power in renter’s pockets. And as adoption of AI-enabled rental search tools accelerates into 2024, both renters and property managers can seize opportunities from this new technological frontier.”

Conclusion

“2024 is certain to bring twists and turns no model can predict, as the new year always does. But we hope that by forewarning of what’s foreseeable—from new supply waves to persistent homeownership headwinds bolstering rental demand—we can help you prepare for what is ahead.”

About the Apartment List research team:

The Apartment List Research Team is a small group of economists and analysts dedicated to understanding the rental market as it evolves rapidly. “On our blog we publish original research reports and offer robust data products for public use.”

7 Predictions For The 2024 Rental Market

Is an Evicted Tenant Still Liable for Rent on the Remaining Months of a Lease?

The Landlord Protection Agency®presents John Reno, Esq.,a highly experienced Landlord – Tenant attorney based on Long Island, NY.

Q:  Dear Mr. Reno:

Thank you Mr Reno for taking my question. Once an eviction takes place, what is the status of the Lease Agreement as it pertains to lost rent? Is the evicted tenant still liable for lost rent for the remaining months of the Lease?
Charles, California.

A: Yes, yes, yes, the tenant is liable for the remaining months- but there’s a catch: Once you re-rent, you no longer can claim damages for lost rent. So you have to wait until you re-rent so you know how much to sue for.

Legal Disclaimer
The Landlord Protection Agency’s “Ask the Attorney” column is for informational purposes only. The questions answered by Mr. Reno on this site do not constitute an attorney – client relationship and are not to be considered legal advice. Not all questions will be answered and some may appear in the LPA Q&A Forum.
The Landlord Protection Agency recommends that you seek legal advice before using any of the material offered on this web site, and makes no guarantee on the effectiveness, compliance with local laws or success of any of the material offered on this web site. The Landlord Protection Agency is not engaged in rendering legal advice.

Southwest Wake County’s growth spike shows it’s no longer a bedroom community

What used to be a mere cluster of Triangle-outskirt towns is now one of North Carolina’s centers for economic growth. Even by Triangle region standards, which have been significant, Southwest Wake County’s growth has spiked over the last two decades.

The Census Bureau recently reported growth rates of approximately 26 percent in Apex, 35 percent in Holly Springs, and 44 percent in Fuquay-Varina, outpacing Raleigh in 2016. Residential growth in Holly Spring

 

s alone is expected to grow so rapidly that for every three residents today, there will be five by 2025.

As a site selection specialist and a local resident, I have seen the impact this has had on the workforce. Joanna Helms, Apex Economic Development Director shared, “Most people don’t realize that Apex has over 50 thriving companies that range from advanced manufacturing, wholesale distribution and precision machining to information technology, computer gaming and software development, as well as micro brewing.”

 

Following the population growth, retail market vacancies have been competitive, and are currently at 2.8 percent according to CoStar. It seems that almost every week, another grocer, restaurant, or other retailer announces an opening. As of November 2017, Southwest Wake had almost 30,000 square feet of retail space under construction, as well as five shopping centers proposed. Current mixed-use developments in Holly Springs and Fuquay-Varina create tremendous retail and mixed-use opportunities for business owners and consumers alike.

While retail development will always follow the rooftops and urban areas continue to thrive and grow, a new trend is emerging where many companies are migrating closer to their workforce. This has not only reduced geographic and traffic concerns during the recruiting process, but has also developed a quality of life for employees that, in turn, improves the quality of the company. Names such as Dell Inc., Rovisys, and Sequirus are located in the heart of Southwest Wake, producing thousands of jobs and catalyst for economic growth.

 

“Town leaders have strategically positioned the assets of the community to attract more life science companies. Highlights include: more than $100 million has been invested in roads, water and sewer projects and parks and recreation facilities in the last 10 years,’ said Holly Springs Economic Development Director, Irena Krstanovic.

Southwest Wake currently has over 75,000 square feet of industrial and flex space under construction. These properties are in addition to almost one million square feet of proposed development. Local municipalities are looking to grow their commercial tax base, as well as offer incentives for businesses to join their communities.

This, along with land availability, provides development opportunities for any

 

thing from spec space to owner-occupancy. Additionally, the construction of “Complete 540” project going through the southwest, there will soon be expedited access to RDU and other parts of the region. According to Economic Development Director, Jim Seymour, “Fuquay-Varina continues to see strong growth in the expansion of our medium to large manufacturing firms. Our geographical location is one of our community’s greatest assets for manufacturing and distribution.”

Source: https://www.bizjournals.com/triangle/news/2017/12/12/southwest-wake-county-s-growth-spike-shows-it-s-no.html

 

9 Sneaky Fees to Watch for When Hiring a Property Manager

To many landlords, property management services are superfluous, cutting their profit margins to a minimum in exchange for basic services. But the reality is that property managers can make your life extraordinarily easier—and most charge a reasonable enough rate that you can draw a monthly profit from your properties (headache-free).

However, when you’re searching for a property manager to handle your landlord responsibilities, it’s important to note that not all fee structures are the same. If you don’t understand how a manager’s fees work, you won’t be able to compare apples to apples, and you might end up shaving your profit more than necessary if you aren’t prepared for those fees when they come up.

9 Fees to Watch For

These are some of the most common “hidden” fees, extra fees, and differences in fee structure to watch for when comparing providers or finalizing a contract:

1. Rent Due and Rent Collected

Many property managers will charge fees as a percentage of rent, but watch how this is worded—there’s a difference between charging as a percentage of rent due and a percentage of rent collected. A percentage of rent due means your company will charge you based on how much money a tenant owes you; a percentage of rent collected means your company will charge you based on how much money a tenant actually pays you—and is generally more favorable. If you’re charged based on rent due, you’ll end up paying for property management even when your property is vacant and you have no money coming in.

2. Early Cancellation

You may also be charged an early cancellation fee should you break the contract with your property manager before the end of its outlined term. For example, if you agree to work with them for a year and you want out after eight months, you might pay an additional few hundred dollars. Be especially wary of this fee with untested property managers.

3. A La Carte Management Fees

“A la carte” management fees refer to a suite of extra fees a property manager may charge you in addition to basic services. Usually, a property manager will either charge a higher price (and no additional fees) or a lower price, with multiple additional fees, somewhat evening out. Accordingly, it pays to know what fees are applicable and what they might run you. The remaining items in this list could all be classified as a la carte management fees.

4. Vacancy

If a company isn’t charging you the full cost of management while your property is vacant, there may still be an additional vacancy fee. Rather than collecting a percentage of rent due, they may collect a smaller amount from you as a kind of retainer.

5. Advertising

When it comes time to seek a new tenant, some property managers may charge you an additional advertising fee. This would cover the cost of creating media (such as taking photos) and placing it on sources like online listings or paper publications.

6. Leasing

A leasing fee may apply when you find a new tenant for your property. This covers the cost of drafting and securing a new lease agreement and is generally low in cost. If the cost here is high, it should raise a red flag, especially if your resulting tenant turnover seems to increase.

7. Lease Renewal

Lease renewal is even simpler than initial leasing, but it may still require a fee. You may need to draw up new paperwork or renegotiate terms with a tenant, and that means your property managers will be doing a bit of extra work. Expect minimal fees here as well.

8. Maintenance

Property management fees should cover basic instances of maintenance and repair, but some companies may charge extra for big jobs, or for an inspection between tenants.

9. Eviction

Eviction can be a messy process, and if you ever need to evict, you’ll be grateful you have a property management service in your corner. Most property managers will handle the eviction completely on your behalf, but some will charge you an extra fee for the extra work involved. Expect to pay at least a few hundred dollars for this process.

Apples to Apples

Different companies might charge money in different ways, but if they’re offering similar services, you’ll likely find the bottom-line price of each to be competitive with one another. The big difference here is how you plan on using your property management company; for example, if you’re looking for long-term arrangements, an early cancellation fee shouldn’t factor much into your decision. Try to consider all these factors and all price points when comparing providers and making your decision.

Source: biggerpockets.com

How the Rent Stole Christmas!

We thought this little meme would give our tenants a good Holiday chuckle. #RentIsDueJanuaryFirst #Already! Happy Holidays to everyone and travel safe!

#grinch #howthegrinchstolechristmas #happyholidays

8 Tips for Preparing Your Properties for Winter

With the weather more unpredictable than ever, you’ll want to be sure your properties are well prepared for whatever weather may head your way. For those of you living in more temperate climates, now is a good time to perform some annual maintenance on your properties. Here are some suggestions to get you started before that first snow storm hits:

· Have snow removal equipment supplies ready and waiting. No one (or almost no one) looks forward to a big snow storm, but it can be even worse when you realize that you’re out of salt or sand, or your snow removal equipment needs a new motor.
· Be sure to get up on the roof and clean out leaves and other debris from the gutters. Clogged gutters can lead to all sorts of issues when the rain or snow arrives.
· While you’re up there, be sure to inspect the roof. Be sure to keep an eye out for missing or broken shingles or shingles that look like they’re curling up. Taking care of roof problems now will eliminate costly winter repairs, while ensuring that the roof is able to withstand the onslaught of rain or snow that is likely.
· Have maintenance check all furnaces or boilers on the property, repairing any issues immediately. Emergency calls are costly.
· Inspect windows and doorways for drafts and seal the drafty areas immediately with exterior grade caulking. New weather stripping will also work to seal any drafty areas around doors.
· Be sure not to neglect the landscape around your properties; checking all trees for weakened tree limbs, removing them before they have the chance to possibly come crashing down on a tenant or employee. Also take the time to inspect the property for dried brush, which can easily dislodged during a wind storm and become a hazard to anyone walking on the property.
· If your property has wood-burning fireplaces, be sure to have each fireplace inspected prior to use to ensure that the flue is in good working order and that wildlife has not taken up residence in the chimney.
· Provide your tenants with a list of things they can do to save energy and stay safe during the winter months.

Being prepared can eliminate costly repair bills, while keeping your tenants safe and warm during the cold winter months.

Source: PropertyManager.com

More potential homebuyers consider renting instead

If you are planning to rent a home, expect some extra competition. A new survey from real estate marketplace Zillow shows more potential homebuyers, perhaps growing frustrated at the lack of available homes, are considering renting instead.

That means consumers who have no alternative but to rent will go head to head with consumers who have the means to buy a home but have decided to keep their options open and rent a place for a while longer.

Zillow has broken down the ins and outs of the typical home search. For those who want to rent a place, it now takes an average of 10 weeks to find a home to rent. It takes two weeks longer if you’re looking in a tight rental market.

But for those who plan to buy a home, the average search takes 17 weeks, in part because rising prices have pushed more homes out of range and the overall decline in inventory means there are fewer homes to choose from. The Zillow survey-takers found that most consumers who recently moved into a new home considered both buying and renting before settling on one or the other.

Continuing to rent an easy option

Just how tough is it to buy a home these days? The Zillow survey found more than half – 54% – of buyers lost the first home on which they made an offer. For many of these buyers who were renting at the time, continuing to rent became an easy option.

“The line between renting and buying is blurry, and that’s a sign of the times,” said Zillow Chief Marketing Officer Jeremy Wacksman. “It’s difficult and time-consuming to find a home to move to, especially in competitive housing markets.”

Wacksman says keeping rental options open can be a savvy strategy in today’s housing market. Renting while still looking to buy allows him or her to avoid settling for a less-than-desirable home.

Still hard to buy, but for a different reason

After the financial crisis more people rented because they simply couldn’t qualify for a mortgage under the new, suddenly tighter lending standards. Now that more people can afford to buy, there are fewer homes to purchase.

Zillow notes that renters now make up a larger group of the U.S. population than at any time in the last half century. Last week, the U.S. Census Bureau reported the homeownership rate rose very slightly to 63.5 percent in the third quarter of 2016 – recovering slightly from a 51-year low.

Source: consumeraffairs.com

General rules to follow for an efficient and fire hazard free dryer:

General rules to follow for an efficient and fire hazard free dryer:

1. Clean the lint trap screen after each dryer cycle.

2. Wash the lint trap screen after 20-30 loads. Let it air dry before replacing.

3. Use a vacuum hose to suck out any remaining lint inside the dryer where the lint trap is stored.

Happy Ask a Stupid Question Day

Happy National Ask A Stupid Question Day! Now’s your chance to ask us questions you’ve always wanted to about #Leasing and #PropertyManagement, but didn’t because you felt they might be “stupid”.