Call Today
Resident Survey 
Abberly Place Apartment Homes
500 Abberly Crest Boulevard,
Garner, NC 27529

Get e-mail notifications of new blog posts! Enter email address below.

Delivered by FeedBurner


Apartments Raleigh NC Blog

RSS Grab the Abberly Place RSS Feed

Think Before You Buy a House

Joseph Coupal - Thursday, December 12, 2013

It is considered a known fact that home ownership is a part of the American dream. But don't for one second think that home ownership is all sunshine, rainbows, and ice cream sandwiches. There are serious trade-offs that you should know, understand, and accept before signing on the dotted line.

1. Mortgage debt -- a marriage you can't divorce

According to the Census Bureau, the average home price in 2010 was $272,900. A traditional mortgage will finance 80% of that, or just over $218,000. The Census Bureau also reported that median household income in the U.S. was just over $51,000.

Are you comfortable owing over four times your total gross income (before taxes)?

You may be thinking, "But if I don't buy a house, I'm throwing away my money to a landlord with rent!"

Would you rather be "throwing away" your money to a landlord, or to a bank? Because if you bought that $272,000 average American house with a $218,000 loan at 5% for 30 years, you'd pay over $52,000 in interest to your bank of choice over the first five years alone!

Before the house was paid in full, you will have paid that bank over $203,000 dollars -- in interest alone!

2. When you own the house, you pay for the maintenance and repairs

Landlords get a bad rap. A respectable, professional landlord can make life orders of magnitude easier. They are your on-call repairman, plumber, hardware store, and lawn maintenance company.

Air conditioner compressor breaks on the hottest summer day? Landlord will take care of it. Snow storm knocks a large branch into the yard? Landlord will take care of it. Bathroom drain cloggs? Landloard will take care of it.

Nothing like a surprise $5,000 expense (with interest) to ruin those summer barbecue plans.

3. How long did it take to save up that down payment?

In our "average American" example, our potential homebuyer would have to put down a payment of $54,000 to qualify for the traditional mortgage. After closing costs and miscellaneous expenses, let’s call this a round $60,000 just to purchase the home and get a loan approval.

That means that in truth, this buyer needs a decent bit more than $60,000, though. The bank will not make a loan for a borrower who is putting 100% of their liquid assets into the home. Banks like back-up plans, and without some cash cushion, there is no real back-up plan.

So now, our typical American, must save somewhere in the neighborhood of 150% of their annual income to comfortably afford the down payment.

It may make more sense to take that $60k to $75k savings and invest in a target date fund, or an index fund. Those investments are liquid, they can be rebalanced, they don't require property taxes, and their toilets won't overflow, forcing you to pay a plumber to come out on a holiday.

4. Buying a home is not an investment

This final point will be hard to swallow. Buying a home is not buying an investment. It's buying a highly leveraged forced-savings account.

According to data from Freddie Mac, the inflation adjusted return for an investment in a home bought in 1970 is just over 27% through the second quarter of this year. That's a 27% return over a 43-year holding period!

If buying a home isn't an investment, then what is it?

It's a forced savings account. Along with that healthy dose of interest that goes to the bank every month is also a sliver of principal pay-down. Over 10 to 20 years, those principal payments can add up to a good bit of equity. So for those individuals who have trouble putting money aside in savings every month, this is an attractive feature.

But the point is, don't buy a house thinking it is a panacea for financial woe. If you want to maximize your investments, look elsewhere. If you want real estate exposure, consider a REIT. Don't be fooled into thinking that buying a home is a one-way ticket to the good life.

If you are still sure you want to join the ranks of homeowners, go for it. Your decision is thoughtfully considered, you've done the research into the upsides and the downsides, and you're making your own decision.

Personal finance and managing money is as much or more art than it is science. There is never a single right answer that applies across the board. We must all consider the risks, the rewards, and our own personal situations, and then act thoughtfully.

For more information on renting an apartment in Garner, NC contact Abberly Place Apartment Homes.

Daily Finance

Recent Posts


breast cancer walk, NC community events The Time Traveler's Wife MLK celebration in Raleigh diets Beer Month events, Raleigh, Garner Redbox has a great deal recycling Tar Heels Garner pride Memorial Day recipes apartment resolutions pet friendly apartments, Raleigh HHHunt New Hope River Valley Happy Easter how to improve credit score Father's Day New Year's Eve health and fitness three bedroom apartments in Garner, NC Financial advice St. Paddy's Run Green 8k best quality of life improve credit score free rent indoor air quality environment veterans day parade Raleigh fireworks, Raleigh, NC Best Run Cities interest calculator research triangle park best place to live and work fresh fruits and vegetables Garner NC three bedroom apartments, Raleigh increase gas mileage, NC healthy eating Raleigh, NC area activities space saving apartment furniture HHHunt Apartment Homes relocating to Raleigh desserts skyscrapers ways to go green how to start beekeeping high profile universities events losing weight Alice in Wonderland GRA eastern carolina university Raleigh Area sports green holidays apartment contest fun ways to burn calories St. Patrick's Day Parade pet friendly apartments in Raleigh, NC Arnold Palmer designed courses coke Abberly Place making apartments green Self-Help Lake Benson Park St. Patrick's Day event three bedroom apartment in Garner, NC items for sale Duke University food gift baskets roommates compound interest leftover dinners renting after retirement New Year Museum of Natural Sciences urban beekeeping spaghetti community buildings tornado plastic Mental Health Raleigh events renting in Garner, NC healthy golf summer activities for kids negative attitude red hawk Gala in the Garden Groupon fall events kitchen cooking one bedroom apartments, NC summertime drink before a tornado Earth Day Festival teaching kids the value of money start a supper club St. Patrick's Day Jordan Lake March Madness sports bars Nixon prank Sunday in the Park concert series Fun Facts Labor Day holiday events kitchen tools Tax Day Restaurants open for Thanksgiving Dinner renting or owning in retirement how to be a good roommate flu shots american diet hunger stay cool eco-friendly mild winters model apartment home furniture Martha Stewart rent or buy community holiday North Carolina State Fair Coca Cola Easter relocating to Raleigh, NC how to get out carpet stains Google Instant Raleigh nightlife personal safety Taste of Downtown Raleigh Gourmet Food Tour Winter Holiday Season downtown Raleigh Restaurant Week apartments for college grads Resident Party Irish pubs Raleigh excercise teacher gift ideas pullen park Do More for Pets Real estate ways to burn calories apartment floor plans green decorating decision to rent or buy Garner apartments Black Friday deals green cleaning products Garner, NC hiking trails retirement how to save money Black Friday A Movie With Dad (Free) Fun Fact Friday Museum Exploration renting vs buying a home tips on renting charity swim for cancer, Raleigh nutrition good food newly weds rentning events in downtown Garner apartment decor Search Engines Around Town Holiday events, Raliegh Raleigh NC Carbon Leaf rent or buy a home house plants for indoor air quality during a tornado heat index in Raleigh Betty White energy efficiency Raleigh ranked number 1 eating margaria recipe fitness centers March Madness kitchen Triangle Restaurant week halloween events, Raleigh apartments party idea Raleigh Festivals televison commercials Liberty National renter's insurance apartment wishes Garner Revitalization Association Mom's Day Marbles Kids Museum Carolina Panthers Raleigh parks Pet friendly Apartments in Garner Raleigh 1992 improve indoor air quality Adult Best Run City Thanksgiving dinner keep the environment clean christmas holiday raleigh NC drink recipe relocating to Raleigh NC When to buy a home go green without plastic vacation spots pet friendly Halloween events recipe for summer Concerts and events in Garner senior learning program save money on renting wealthy rent savings tornado safety wardrobe Food hockey positive mental attitude renting in Raleigh, NC don't drink and drive carolina hurricanes apartments in Charlotte NC Garner litter sweep green methods Have a Coke a Smile and a great weekend triangle area dogs and cats Jennifer Moran cholesterol winter cold two bedroom apartments, Raleigh global warming Turkey two bedroom apartment in Garner, NC Memorial Day appetizer recipes torndo warning one bedroom apartment in Garner, NC eating outside Downtown Garner roommate of the year apartment pets holiday ornaments apartment communities put away decorations Winterfest two bedroom apartments, NC North Carolina two bedroom apartments in Garner, NC apartments in Raleigh, NC hurricanes renters insurance how to keep new years resolutions garden parties grilling farmers markets renting vs owning abberly place fitness center after a tornado Triangle area golf courses apartment in Garner, NC ornaments abberly place apartment homes summer vacation travel location happiness machine fishing street festival roommate duties holiday popcorn North Carolina Beer Month eat healthy renting an apartment one bedroom apartments in Garner, NC new year’s eve high tech industry Raleigh bars Abberly Place Garner Apartment Homes rent or own valentines day gift ideas lego expo Triangle Apartments near Raleigh metro Raleigh teaching kids to save money Vending machine flowers and plants tornadoes Music on Main Concert diy beekeeping burn calories discipline of living a positive attitude Raleigh March Madness sports bars raleigh go green food how many billionaire in the world corn maze apartment management company personal health The Gratitude Pool Party hurricane track two bedroom or three bedroom healthy food urban beekeepers three bedroom apartments, NC apartments in the Carolinas interational festival of Raleigh aprtments in Garner NC Olympic Fun Day tips for apartment pets MasterMinds apartment decorating music and arts festival vacation destinations apartment pets, Garner, Nc Rent-to-own shrink wrap renting vs buying plasticx young adults New Year's Eve Raleigh Positive living in Garner tax free weekend, NC ads pet lovers tree lighting, Raliegh International Festival of Raleigh Spare Change home ownership Raleigh North Carolina apartment fire relax winter health NC apartments for college graduates green gas mileage, NC decoration swap clothes St. Patrick's Day Raleigh home depot barbeque new year’s day great place to come home to Papa Johns Pizza renting Apartment Homes credit score health one bedroom apartments, Raleigh Raleigh area college grads golf courses new places to live in Raleigh Raleigh New Year's Eve how to meet people hurricane insurance how much is a billion coach Chapel HIll festifall Arts Festival Easter egg hunt lego festival buying and renting Garner wahm rare syndromes Holidays Memorial day events Raleigh, NC Thanksgiving Soda christmas decorations apartment amenities Memorial Day Weekend JC Raulston Arboretum Susan G. Komen Walk team icebergs food gifts retire wealthy healthy school lunch ideas Apartment Living furniture for sale house plants that help indoor air quality chicken recipe leftover turkey recipes newlyweds rentning drink responsibly Abberly Place residents Father's day gift ideas Raleigh restaurants near Raleigh NC winter workout holiday food try to meet people Arts and Entertainment first night Raleigh Third Tuesday new year’s resolutions green cleaning Going Green Raleigh Winterfest gas prices, NC Music apartment community Holiday Season Jeffrey Gitomer Pet Friendly Apartments kids savings account renting in Garner best place to live for young adults apartment building fire relocating downtown Raleigh restaurants HH Hunt Abberly Place Apartments Waste management why rent living in an apartment Credit Cards redbox movie rental renting an apartment in Garner, NC free coffee Free Music on Main Street Series Google renting apartments near Raleigh goals for kids Local restaurants NC State Fair Mother's Day Concerts and Events Memorial Day Panthers abberly place apartments homes top 25 places to retire ira Missing Dog Vending hiking home insurance coverage Raleigh fireworks Raleigh tornado Durham Earth Day Festival Rachel McAdams Raleigh ranked no. 1 Raleigh, North Carolina Kentucky Derby family fun North Carolina Museum of Natural Sciences Resident Advantage Program Super Bowl how to get out stains apartments in Garner, NC plastics Generation Rent chairs for sale rent vs. buy dieting retirement years healthy school lunch tips twister Apartments in Garner NC dog parks, Raleigh Festivals around Raleigh April Fool's Day meatballs hurricane awareness Raleigh fourth of July dining tables for sale Wearin’ of the Green Festival, Raleigh deciding between renting and buying buy or rent jokes renting green living Susan G. Komen Walk, Raleigh hurricane path changing apartments concert series positive attitude bunnies how to get out sofa stains room mate duties holiday trees monthly budget fourth of July, Raleigh, NC Audrey Niffenegger renting in retirement Southern charm valentines day gifts Go Green christmas safety New Year's resolutions New Zealand Personal development Little Engine That Could White Deer Monster Dash and Family Fun Run One bedroom holiday giving apartment homes Abberly Green food and apartments cleaning April 1st National Public Lands Day St. Patrick's Day Parade Raleigh best place for educational opportunities popcorn First Night in Raleigh hurricane irene Father's day gift Getaways conserve energy in your apartment apartments in Garner cancer walk, NC 401k things to do in the Triangle perfect margaria recipe walking Wachovia iMax Theater Raleigh apartments winter weather teacher holiday gift ideas GoogleInstant tornado in the south