As a potential first-time home owner, it is easy to get discouraged due to what they hear in the news of limited home inventory. However, with rental rates in the area rising fast and on trend to continue, now is the time to invest in real estate. While inventory may be limited, there are still several benefits to buying now.
Fixed Monthly Payments
When renters sign a lease, the rate is only negotiated for the term of that lease. The longest lease term that Georgia apartments generally offer is 12-months, at the end of which, the rate inevitably increases. Atlanta-area apartments see an average 4 to 6% rate increase. Based on the average one-bedroom rental rate in Atlanta of $1350 in 2017, in 5 years’ time, that same apartment would cost a renter $1723 per month.
If that renter were take same monthly payment and apply it towards a home purchase, they would likely be able to afford roughly a $225,000 home in the metro Atlanta area. After 5 years of $1,350 mortgage payments, not only would their payments not increase, but they would have earned equity.
Surprisingly Low Down Payments
When renters start a new lease, there are lots of administrative costs, deposits, application fees, and various other fees that pop up that will end up being more that they anticipated. Some of the most common are:
- Application fee: $50 - $100
- Administration fee: $50 - $200
- Security Deposit: $500 – Two Month’s Rent
- Parking fee: $10 - $100
- Garbage fee: $5 – $35
- Pest Control: $5 - $20
- Storage fee: $25 - $250
- Pet Fee: $200 - $1000
- Pet Deposit: $100 - $1000
Anywhere from $1,000 to $5,400 can be spent just to get approved for an apartment. And most of these fees are non-refundable so once you pay them to the landlord, it goes straight into their pocket.
When a renter is ready to buy for the first time, there are several different loan options out there that can be utilized to allow for down payment that works best for their budget. While not everyone can afford up to 20% down, there are great loan options that can get you 3.5% down or even NO down payment. There is even a loan option right now with Metro Brokers Financial that offers a 2% non-repayable down payment grant to qualifying borrowers! To find out more about these options, contact the financial advisors at www.metrobrokersfinancial.com or call 404.847.2525.
Return on Your Investment
The real estate market is currently hot and continuing to head in a positive direction. Unlike the industry 10 years ago, builders are building discriminately, lenders are lending smartly, and mortgage rates are still very competitive. Inventory remains limited because people are not fleeing their assets. The market has not reached its peak so there is a lot of opportunity for those interested in dipping their toes in real estate pool to get acclimated.
Many renters are afraid to joining the growing number of first-time home buyers because it seems overwhelming. But as the monthly rental rates continue to rise, it will force renters to take a look at the housing market as viable alternative to temporary housing. With multiple programs to assist first-time home buyers and tax incentives available, now is the time to take advantage of what the real estate market has to offer. Contact Better Homes and Gardens Real Estate Metro Broker at 404.843.2500 to speak with an agent today.