Tips and Advice for Home Buyers and Owners

 

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home

  
How much rent have you been throwing away over the years?
 
Rent1 year3 years5 years10 years
$550 6,000 18,000 30,000 60,000
$600 7,200 19,800 33,000 66,000
$650 7,800 23,400 39,000 78,000
$700 8,400 25,200 42,000 84,000
$750 9,000 27,000 45,000 90,000
$800 9,600 28,800 48,000 96,000
$850 10,200 30,600 51,000 102,000
$900 10,800 32,000 54,000 108,000
$950 11,400 34,200 57,000 114,000
$1000 12,000 36,000 60,000 180,000

Fact: Your rent will increase
The above does not take into consideration the fact that rents are increasing at usual rates due to the increased cost of:

1. construction
2. operating expenses
3. interest rates
4. real estate taxes
5. shortage of rental units

Fact II: Property rates will double
If property values appreciate (increase in value) at the rates below, it will double in value as shown.
  

RateNumber of years value will double
5% 15 years
6% 12 years
7% 11 years
8% 10 years
9% 9 years
10% 8 years

For example, if you owned a home today that is worth $80,000 and if it increased in value at the rate of 5% per year, it would be worth over $166,000 in 15 years, an average of $5,733 per year or about $477 per month—more than some people pay in rent.

On the other hand, someone paying $700 in rent would have paid out $126,000 in 15 years and have no equity to show for it. No wonder the purchase of a home is one of the best investments you'll ever make!