Call Today
Resident Survey 
Abberly Place Apartment Homes
500 Abberly Crest Boulevard,
Garner, NC 27529
abberlyplace001@myltsmail.com

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


Tags

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

Archive