Abberly Place Blog

The question has arisen more and more. Should I rent or buy? The answer is personal to your situation. While mortgage rates and housing prices are low, there is still a lot to be said for renting an apartment in Garner, NC.

Based on your financial situation, your job situation and frankly, how much time you want to spend on home repairs, the answer could be very different for every individual or family.

There is much to be said about renting. Sudden roof leaks or broken appliances can make your wallet take a hit. Unforeseen home expenses cannot really be incorporated into a budget.
 
If there is any possibility that you will not stay in the Raleigh area or that your job will relocate you, renting may be a better option. Closing costs and fees can really add up, not to mention the first several years of mortgage payments go to the interest alone not the principal.

But there is an even more practical reason for renting. Maybe you just don’t have any interest in home repairs and yard maintenance. Apartments are the solution to maintenance free living without the condo fees. With so much to do in and around the Raleigh area your time off should be your time off to spend however you like.

Talk to a financial advisor and review your expenses first when considering renting.

Contact Abberly Place Apartment Homes if you want more information on renting in Garner, NC.

When deciding whether to rent or buy, you are making the choice to rent an apartment home or renting the capital needed to buy a home. Most Americans don't consider that they are renting equity (from the bank) to buy a home. As you are aware, very little equity is built in the first few years of paying a mortgage. Many people are surprisingly still very unaware of this fact.

This following article explains how renting is financially better than buying in about 75% of cases!

For the Past 30 Years, Renting Was Generally Better Than Buying

If homeownership is the American dream, then the nation had better wake up. That's the message from a new research paper that examines whether buying or renting a home was a better financial decision over the past 30 years. Most would find the result surprising: over the period Americans were better off renting between 65% and 75% of the time, depending on the investment alternative.

The article essentially looks at eight-year periods and assumes that a person invests the money he or she saves by renting. Since buying is generally more expensive than renting, renters have extra money to invest. It also makes a number of assumptions favorable to homeownership, including gains from the mortgage interest tax deduction, the option to refinance, and the ability to walk away -- loss-free -- from an underwater mortgage. Still, renting wins approximately three-quarters of the time.

The staff at economic research organization e21 explains why this result actually shouldn't be so shocking:

Counter-intuitive as the finding may be to some, it is actually quite logical. Unless someone possesses the cash necessary to buy a residence, he or she will be renting one way or another. The choice is between renting the property directly or renting the capital necessary to buy the property. The amount of capital to be rented is a function of house prices, while the bulk of a mortgage payment is interest, which is the rental payment on this capital. After 2 years, the typical 30-year amortizing mortgage balance has been reduced by less than 3%. This means that a household that took out a $300,000 mortgage with a 5% interest rate to buy a home has only reduced its mortgage balance by $8,600 after two years despite spending nearly $39,000 in total over this period.

Housing advocates may respond by pointing out that at least the $8,600 in this scenario went towards home equity rather than simply being squandered on rent. But, as demonstrated in the Real Estate Economics article, the principal component of each mortgage payment - i.e. the portion of the mortgage payment that goes towards reducing the principal mortgage balance instead of interest - is an added expense renters don't have.

This turns the real estate industry's biggest talking point on its head: you aren't throwing rent into the wind each month, you're casting away equity.

Of course, that equity also provides a potential benefit. The analysis's eight-year rolling methodology appears to miss the biggest reward of owning a home: living rent-free once the home is paid off. After that 30-years is up, the longer a family remains in that home rent-free, the more buying pays off. Taking this into account would almost certainly change the result in some, if not all situations. Renting may be a better option initially, but there's no eventual reward.

An important point still needs to be made here: buying a home that you don't plan to live in for an extended period of time probably isn't a great idea. The rent you pay in the form of interest on a 30-year loan for five or even 10 years won't be any better than if you had just rented outright. But if you're planning on living in a home for 30-plus years, then you could potentially get some benefit from buying rather than renting.

Original article by By Daniel Indiviglio, The Atlantic

We all need a place to call home but even with the real estate downturn, many people continue to think that buying a home is a good investment and a way for them to build wealth. When times were good, this was not really the case for most people.  Wherever you choose to live, make sure it’s for the right reasons. Owning a home can be rewarding. Renting an apartment home with Abberly Place can also be very rewarding. Don’t just take our word for it – check out this article on Yahoo Finance – Why Your Home is not the investment you think it is. In recent months, the housing market, interest rates and the economy have been the focus of many news stories and are key issues in the political arena. Consumers have been inundated for years with visions of the American Dream and why home ownership is a great investment. As seen with the recent housing crisis, home ownership may not be right for everyone.

• If you bought in Rochester, N.Y., in 1980, you would have seen only a mediocre 4% annual growth for the next 25 years.
• If you bought in Dallas in 1986, as the oil boom went bust, your home wouldn’t have appreciated at all before 1998.

It is also important to look at the “net appreciation”.  Most people do not subtract all of the interest paid to the banks, maintenance, decorating costs, closing costs, taxes, and insurance from the appreciation.  In many cases, especially if you do not own your home for more than a few years, there is not true appreciation and in more and more cases, there is negative appreciation.  Many do not realize the real financial and practical advantages HHHunt residents experience every year when they decide to rent an apartment home at one of our communities. There are just a couple of points to consider and think about. Renting is a long term investment and very rewarding. Especially in the North Carolina area we are a respected and very diverse community. Be sure to take a look at our communities and our activities we have to offer. Our unique apartment homes at Abberly Place combine convenience, comfort, and technology for today’s lifestyle in our apartment homes. Our beautiful interiors are designed to optimize the way you live, work, and play. Contact us today to learn more about renting at Abberly Place, or feel free to stop in and take a tour of our community.

Apartment Living in Garner-Raleigh, North Carolina

As a resident of Abberly Place Apartments you have made the choice to rent at our community and enjoy the many benefits and perks of renting an apartment home from HHHunt.  Although you truly enjoy the convenience, service, freedom, and flexibility that comes from renting an apartment home at Abberly Place, some of you still feel pressured to buy a home.  This pressure can come from other family members, realtors, friends, and the media but there are so many smart reasons to continue to rent your home.  Just check out this article on renting an apartment home and when to buy and read about some of those reasons!

Tell us what you think.  Do you agree or do you disagree?

Abberly Place Apartments is about Luxury, Location and Lifestyle.  We are located in Garner, NC right near Downtown Raleigh

Jennifer Moran, HHHunt