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Rent or Buy - the cost is going up

by The Mike Parker Team

Whether you continue to rent or decide to buy a home, according to recent Zillow 2014 housing projections, the cost is going up.  Zillow projects home prices to increase nationally by 3%, mortgages to rise to %5 interest rate by the end of the year and rents to go up by 2.5% on average.

If it will cost a person more whether they rent or buy, the conclusion can be made that one way or the other, they will pay for the house they occupy.  The question will be whether they buy it for themselves or their landlord? Will they benefit from the equity build-up and the appreciation?

The following analysis looks at a $200,000 home that can be purchased with a 30 year FHA mortgage at 4.3%.  The assumption uses 3% appreciation and tenant currently paying $1,750 a month in rent.

The house payment, principal, interest, taxes and insurance would be about $1,609 a month.  However, once you consider the benefits of the principal reduction each month, the appreciation and the tax savings and the increased cost of maintenance, the net cost of housing is closer to $630 per month.

Even if you ignored the tax savings, the net cost of housing would only be $919.06 per month.  The tenant would pay considerably more to rent than to own the home.  Over time, the decision to buy a home could result in a considerable financial asset that the tenant will not benefit from.

To estimate your cost of housing, use the Rent vs. Own

8 Reasons Why Your Home Is Unsellable

by Mike Parker

Submitted by Jill Kuchle:

Here is another article by real estate expert Barbara Corcoran.  This was featured on the TODAY show.  Here is a link to her video as well.

Housing trends sail by faster than most of us have time to notice, but when it comes to selling your house, you might suddenly wish you’d sat up and paid attention before. Some styles can be put down to the vagaries of fashion and are easily fixed — gaudy wallpaper isn’t difficult to replace, but moving a laundry room above ground or fitting a proper staircase is another story entirely.

Here’s a list of the big no-no’s, the relics that make a house unsellable:

Small houses
Small is not the new big I’m afraid, at least not yet anyway. People like to have space to live in and a very small house can deal a serious blow to your possible asking price. If you can’t afford to physically increase the size of your house, you need to do everything possible to make it look bigger.

One bathroom
We don’t want to wait to use the bathroom. Not any more. With so many people used to the luxury of multiple bathrooms, it is a hard sell to get them to take a step backward in time.

No air conditioning
Installing central air to your house will cost you about $10,000-$12,000, but if there was ever a juicy bone to get a buyer interested, this is it.

Fuse boxes
Fuse boxes? People expect circuit breakers nowadays, and if you want to modernize your electrics, consider spending $2,000 to replace those outmoded old fuses.

Spiral staircases
Pretty for sure, but the novelty has long worn off. Ever tried carrying a sofa up a spiral staircase? If you have, you’ll know why they might put your average buyer off.

Basement laundry rooms
What a nice idea that was, why not stick those cumbersome noisemakers down in the basement out of sight? Because ever since we did, washing clothes has meant a trek into the dank recesses of our houses. Doing the laundry is so much more appealing when the washing machine is within spitting distance of the clothes to be washed. If you have the space upstairs, it’s time to accept those big old machines back into the fold.

Popcorn and stucco ceilings
Talking about the vagaries of fashion: No one wants to see these any more. Smash them off with a big stick if you have to.

Basements with outside access only
You’re in your pajamas, it’s a cold winter night, rain hammering against the windows and suddenly you remember. You left your groceries in the basement. Curse this house and curse all who live in it! People don’t want to go outside to get into their basement.

In addition to the absolute stinkers when it comes to selling a house, there are several trends on their way out that you may want to avoid:

They may be big, but they aren’t clever. Think before investing in one of these: Do you really need all that space? An increasing number of people are deciding they don’t. Quality trumps quantity every time.

Separate living and dining rooms
When was the last time you sat down and had a meal in your dining room? If it was recently, you belong to a dying breed. People want to properly utilize all the space in their house, and in this pursuit, the dining room is casualty No. 1.

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Mike Parker - CRS
HUFF Realty
60 Cavalier Blvd.
Florence KY 41042