What is the Cost of Renting & Waiting to Buy?
Are you currently renting and considering buying a property in the future? Have you found yourself asking, "Should I wait to purchase?"
Continue reading as we'll discuss the cost of waiting and what you need to consider before making a decision!
Appreciation: consider the actual cost of waiting. When we talk about appreciation, there are two types to consider:
(1) The first is rent appreciation, which increases annually between 2 to 3%. This means that renting will become more expensive every year (2) The second type of appreciation is price or home value appreciation. In the past few years, we have seen double-digit appreciation rates across the nation - in Atlanta, we’ve seen an annual 8% appreciation.
Take a look at the graph below provided by Keeping Current Matters that helps explain appreciation we are seeing in the top 20 cities year over year.
To help illustrate the importance of appreciation, let's take a look at an example. Say you're considering purchasing a property for $300,000. If you choose to wait until next year and the appreciation rate remains at 8%, that same property will cost you $24,000 more just one year later. This is a significant amount of money to consider when deciding whether or not to wait before purchasing.
It's essential to think about both types of appreciation when making your decision. How much are you paying in rent to a landlord and what are you losing in appreciation by continuing to rent? And if you do wait, how much more will you have to pay for the same property just one year later?
In conclusion, while it may be tempting to wait for market conditions to change before purchasing a property, it's important to consider the cost of waiting. With appreciation rates continuing to rise, waiting may end up costing you more in the long run. Take advantage of the current market conditions and save yourself money in the end!
If you're unsure of what the best next step is for you, reach out to us for a free, 15 minute no obligation phone call! We are here to help you discuss your options and make an information decision.