Prices of homes for sale in Bradenton, Sarasota and Parrish are at the same price points as they were 10 or more years ago. While rent rates are up more than 25% over the past few years. Is now the time to Own a home instead of renting. Here are three considerations if you are thinking about making the shift to buying a home in the Sarasota Bradenton area.
1. How long do you plan to stay put?
Renting has one major advantage over buying a home. Mobility. If you want to move across town, or around the country, simply pack up and go when your lease is up. Owning a home is not quite as simple. You will have to sell your home which can take time. If you are planning to live in the area for at least 3 years minimum, then buying a home may make more sense then renting.
If you are not sure if you like the area, have a need or desire to move soon, then buying a home is probably not a good idea for you. One thing to keep in mind as a home buyer is if you had too, could you rent the home for more than your cost to own? This is a basic premise for any real estate investor. Buying something that does not cash flow does not make any sense. An investor needs to see a profit in order to make it feasible to buy an investment. If your rent would be higher than a mortgage payment for a comparable home, you are in essence, renting to yourself. And making a profit!
So if you buy a home in Bradenton for 150,000 a good estimate of your payment will be 1,100-1,300 a month. Right now, that price range home gets about that or more for an average rent. One of my very recent buyers was able to get a home for 135,000.00. Their payment was 985 a month, while similar homes in the neighborhood get 1,3000-1,400 a month for rent. Not a bad return.
There is a really good calculator I found put out by the New York Times. This could help you determine the best scenario for your situation. Pretty cool graphing on it as well!
2. How is your Credit?
Interest Rates are so low right now! I had a customer lock in a FHA home loan at 3.75% last week (Sept, 2011)!! That was for a 3.5% down, 30 year FIXED mortgage. Low interest There are three considerations if you are considering renting verse buying a home in bradenton, fl. ates translate to lower payments, and increase the amount of money you can qualify to borrow. If you are even slightly considering buying the very FIRST step is talking with a reputable, and local lender. I am a big believer in working with local people versus an internet bank, or online company. When it comes to customer service, the local lenders and mortgage brokers care about repeat business, and their reputation since their business depends on word of mouth advertising.
I have many that I can recommend that can qualify you in as little as an hour.
Once you know what you can afford, and it doesn’t make you fall out of your chair, it’s time to start shopping. If you qualify for a payment that feels uncomfortable, I would make sure to lower your target price to a manageable, and comfortable number. Remember that as a home owner now you will have maintenance and repairs that can come up. Plus, you might want to upgrade those carpets, or paint those walls.
I had a customer call me this past week interested in getting a new rental home. They are a young couple that have never owned a home, and have been renting for their whole independent lives.
The property they wanted to rent was snapped up the moment it hit the market. The rental market here in Bradenton and Lakewood Ranch is very, very fast! Rent prices have been steadily rising as well.
For example a single family home in Heritage harbour that 3 years ago rented for 900 now will get 1200 or more. They were going to need to have first, last, and security deposit, pet fee, background checks etc. They would need 4,100 dollar just to move into the rental. I was able to qualify them for a 150,000 loan for less than1,100 a month TOTAL PAYMENT. Plus they are able to move in to their brand new home with less than 1,700 dollar TOTAL OUT OF POCKET!! That’s 2,400 less than renting a home.
If you find out that your credit is not that great then you can at least know what needs to happen to improve so that you can qualify in the future. At least you can get planning on doing the things needed to get you able to buy a hoime in the future. If you need a reputable company to assist with rebuilding your credit score, give me a call or email. I know some decent local companies that do just that. Credit scores are really important right now, and if you have decent credit, and a stable income, qualifying for a loan shouldn’t be an issue.
3. Are you ready for the responsibility of home ownership?
This question is not meant to insult anyone, but I too once rented an apartment. It was nice to be able to just call down when there was an issue with something in the apartment. My situation was unique in that I had already owned a home before renting. For me, after enjoying having my own home, and the privacy of no neighbors right next to me, and above me, and below, I was ready to buy another home (as soon as possible!) in the Sarasota Bradenton area.
Buying a home is usually one of the largest purchases that someone makes in their life. Home ownership gives you a feeling of pride, stability, and has the benefit of price appreciation too.
Instead of paying someone else mortgage, you are paying off your own.
In conclusion, I think that if you are renting right now, and you have good credit, want to stay put for a few years at least, and are up for the challenges and joys of your own home this is the best time to buy.
Prices have dropped in the Sarasota Bradenton area to the prices that homes for sale back in 2000 and before. The entire real estate market is on sale. Interest rates are at all time lows as well. That makes what you can afford increase so you can get more home for your money. On top of that rental rates on investor owned homes in Sarasota and Bradenton have seen major increases in rental rates making it make even more sense to own vs rent.
There is a lot of cash buyers out in our sarasota/bradenton real estate market that are snapping up all the good investment properties as quick as they come up. Do they know something you don’t? Maybe it’s time for you to jump in too.
If you are interested in getting pre qualified, and talking about buying a home. Give me a call.
We have upcoming first time home buyer workshops that we can give you information about. It will be at the Waterlefe clubhouse on November 7, 2011 at 6 pm. I will have a lender, a real estate attorney, and myself discussing the pros and cons of home ownership.
Call me anytime phone/text/email I am ready to help you! Joe Murphy Expert Real Estate agent for Sarasota and Bradenton