Rising Rents Boosts Ownership Advantages

August 14, 2007

 While home prices are steady or slightly lowering in some areas, rents are on the rise. Many prospective home buyers are opting to hold off on a home purchase in the hopes prices will be lower and more affordable in the future. In the meantime, many of these hold-off folks need to rent their residence, thus pushing up the demand for rentals and increasing rents.

“During the housing boom, the `rent vs. buy’ decision became a buy,” said appraiser Jonathan Miller. “Now the pendulum is swinging the other way. As a result, there are fewer vacancies and increased demand for apartments and other rental units, allowing landlords to raise their rental fees.”

For prospective buyers, the increasing rents are another indicator that this might be a very strategic time to purchase a home, particularly while mortgage interest rates are still historically very low and affordable. By analyzing your finances, including the monthly payout for rent compared to costs of homeownership, a decision to become an owner may look very good. Keep in mind the special ownership benefits, such as tax breaks and equity build-up.

Posted in All Things San Diego, Helpful Hints, Lending, Local Business, Real Estate, Taxes, Things of Interest