The Expert Podcast

It would seem like home rental values are going through the roof and forcing people not to be able to live in a certain location we're going to show you now how it doesn't matter where you live in the country even in the most overheated rental markets you can lock in a low payment for a home that you own without having to move that far so this is not any unique news story rental prices expecting to rise even more this year forcing some to pack up and move this article came out in the beginning of march 22 which is when we're recording this video and it talks about how rental and the cost of living is causing people to move out simply because they can't afford the price increase.

People are moving from major cities to more affordable options which may be a strategy we've talked about that before but long time residents this is bad news if one is a renter especially pricing people out of the market essentially cities with the highest increase include phoenix miami and tampa which have all seen an increase of over 25 percent so if you're living near big city you might think well i can't afford to rent some of these rents are going up 30 40 percent two three four thousand dollars and it's forcing people to make hard decisions.

So what about buying a house well a lot of times a person currently renting might think that it's not possible for them to buy a house well how much would it cost well our website as you've seen at home's cheap talks about buying a house for about two hundred thousand how much would that cost well here's a mortgage calculator for a home value we put in 210 just in case you decide to stretch a little bit with a um five percent down payment financing twenty two hundred thousand dollars at three point eight percent thirty year mortgage your total payments fourteen hundred your core payment is about a thousand but then you add on your taxes you're gonna pay property tax a couple hundred dollars a month insurance you might have pmi you might have other things brings it up to about 1400 at current rates right.

So you might think well what can i get for 200 000 well before you do that look back at other videos we've shown in every market there's houses available we're going to show one momentarily close to new york city the top market on the list in fact here is the most expensive u.s rental markets top on the list new york city mark median price 3100 for rent and it went up 26 percent in the last year so if you were in new york city and you were renting for let's say 2000 or 2200 your rent went up to maybe 3000 and all that rent goes to your landlord you don't get to keep any of it and that property you're renting also went up in value if it was a 500 000 property now it's probably worth 650 or 700 so not only did your landlord get your 2 000 a month for the last two years profit they also benefited from your value going up with them having to do nothing so how can you do the same thing.

Well you might say i don't want to live far from new york what about here's one example here's a house floatsburg new york single-family house three-bedroom small house 800 feet but how big is your apartment got a little bit of land a little bit of privacy well where is that compared to new york well it's an hour away well you might want to live in manhattan because it's convenient maybe you work there maybe you work in north jersey maybe you work in um in southern connecticut but if you wanted to stay in the same area here's a house without even trying that's 200 grand you might say i want to be closer well i'm sure there's houses that are even a little bit closer depending on what you want to do.

There's going to be a trade-off you might have to drive an hour a day an hour 12 minutes each way to get to manhattan if you have to go every day maybe you work from home three days a week but what's that trade-off worth well if you are paying 3100 and now you're going to be paying 1400 you're going to be putting 20 grand a month in the bank i'm sorry you're going to be putting 20 grand a year in the bank by living here versus manhattan and in two years you might have saved up 50 grand and this house might be worth 250 if it goes up at the same rate that the experts are saying it's going to because they says prices expect to rise even more so if it goes up even 10 a year they're talking about maybe 20 10 a year on this house makes it worth 250 in a couple years roughly plus you got another 40 50 grand in the bank by making this one decision for two years you could instantly have an extra one hundred thousand dollars of personal net worth by making this move.

Maybe you would feel bad about not being in manhattan every day but is it worth a hundred thousand dollars put it another way if you lived in slothsburg or wherever else you could find and somebody said to you hey look if you move to new york city um would you be willing to pay a hundred thousand dollars out of your pocket to move from here to manhattan maybe you would but that's the trade-off to make so the answer isn't really you can't find a place there's places to be found and we're not going to go through a lot of other houses this is one that we found there are properties available near every major city our next video we're going to look at miami that are in the 200 000 range that are decent houses this is not a fixer-upper not a broken down house that you could buy reduce your monthly payment and lock it in.

Because this payment of 3100 that's what it is right now next year might go up 400 bucks a month if you have a mortgage that mortgage is not going to go up it's going to be fixed in place for the life of your loan and all the money that's equity and enter and principal payments go to you reduces your principal and your equity goes up on the value of the house so consider it it's not for everybody i'm sure you're going to have objections about why you don't want to do this and that's fine we're just saying this is an option that you have and it could be very beneficial to your financial well-being even if you hadn't thought about buying a house there's advantages of doing it.

The one thing you might have to get over is well i want a house as nice as my apartment it might not be as nice it might be as big but you're gonna have a yard you're gonna have the ability to fix things up inside without your landlord saying you can't paint the wall not a bad little view there either and this house isn't the worst house in the world inside either is it right is it brand new no that's staged by the way this is fake furniture but it is a house that's decent you could live in and fix up to your own tastes and maybe in some period of time if you do want some dream house later you could sell this take the equity you made on it put it towards your dream house if you want really a five bedroom four thousand square foot house out in the countryside that's gonna cost seven eight hundred thousand dollars that's great.

But if you don't get into the housing market now you may never be able to catch that because that house is going to be going up faster than you're saving money doing this can accelerate your savings and accelerate your personal net worth increase keep an eye on our channel subscribe and we will send you an update every time we post a new example of homes most of the time our videos are going to show you four or five houses in an area that are all 200 or less that are maybe near the beach maybe have acreage maybe your work um work live properties we've done um coverages on lake front property so subscribe and you'll get those updates and good luck with your residence pursuits.