The Finances of Renting vs. Buying Charleston Real Estate
The Finances of Renting vs. Buying
by The KCM Crew on September 14, 2012
Trulia reported this week that homeownership is 45% cheaper than renting in the United States. Jed Kolko, Trulia’s Chief Economist explained:
“Homeownership is cheaper than renting in all of the 100 largest metros, by a wide margin. Despite the recent price rebound, rents continue to rise faster than prices, and mortgage rates are near record lows.
Homeownership makes the most financial sense for people whose strong credit scores let them snag the lowest mortgage rate and who get the biggest benefit from deducting mortgage interest and property taxes from their income taxes.”
(Trulia’s methodology is explained here.)
This news did not come as a surprise to us as we have reported that today’s rental market definitely favors the landlord. Below is a graph of how rental prices have increased recently and where they are projected to go over the next few years based on a report from Marcus & Millichap.
It costs more to rent than own right now. And you don’t get any of your rent back in the future. History shows us, in the long term, you can build equity in a home. Dr. Ken Johnson earlier this year explained in a post on this blog:
“It appears that homeownership creates extra wealth mainly through its ability to force owners to save rather than through property appreciation. Thus, homeownership appears to be a self-imposed savings plan, which through time leads to greater wealth accumulation as compared to comparable renters. In short, buying a home makes Americans save.”
The Joint Center for Housing Studies at Harvard University released a study last year titled America’s Rental Housing: Meeting Challenges, Building on Opportunities. In the study, they actually quantified the difference in family wealth between renters and homeowners:
“[R]enters have only a fraction of the net wealth of owners. Near the peak of the housing bubble in 2007, the median net wealth of homeowners was $234,600—about 46 times the $5,100 median for renters. Even if homeowner wealth fell back to 1995 levels, it would still be 27.5 times the median for renters.”
What Does This All Mean?
We believe David Shulman, senior economist with the UCLA Ziman Center for Real Estate said it best:
“The American Dream of homeownership may be comatose, but it is not dead, and the wake-up call will come in the form of higher rents.”
To understand how you can invest in Charleston Real Estate, please contact:
Shawn Pillion at 843/ 647.9711
1399 Palmcrest Dr
1120777 - Residential
Johns Island, SC
Immaculate totally renovated Charleston SC real estate with dramatic unobstructed views of the Intracoastal Waterway on Deep Water with Boat Lift!!! Home is located in highly desirable The Pointe section of Headquarters Plantation and features: Gleaming Hardwood floors throughout majority of first floor and stairs; Gourmet eat-in Kitchen with stainless steel appliances(Thermadore gas range and dishwasher, Jenn Air 3 door refrigerator, Kitchen aid convection microwave), granite counter tops, custom tile back splash, deep cabinets for pots and pans, recessed lighting, and walk-in pantry; family room with gas log fireplace; formal dining room with tray ceiling; sunroom with tile flooring and river views; custom wood plantation shutters; river views from all bedrooms including Master Suite complete with dual closets, dual vanity with granite counter tops, jetted tub overlooking river, and private balcony for breathtaking river views. The garage level includes a fitness center with its own full bath which could be the 4th bedroom, office, and tons of storage area. The exterior of home is just as impressive with standing seam metal roof, hardi plank siding, double iron gates leading to custom brick patio and perfectly landscaped yard with irrigation system, wraparound porch for 180 degree views of intracoastal waterway, and located on cul-de-sac. Bring your boat and dock on your private deeded slip with 15,000 lb. lift on intracoastal waterway, in addition to the boat lift your dock includes water, power, 72 foot floating dock, and covered pier head which is maintained and shared by a small group of owners. Headquarters Plantation is a Johns Island gated community within minutes of Downtown Charleston and Folly Beach. All furniture and 18' Sea Ray center console boat are negotiable with acceptable offer.
110 Cainhoy Landing Rd
1217805 - Residential
Words can't do justice for this amazing Charleston real estate--please see the beautiful pictures. Custom exquisite details in every corner of this luxury home located on private marsh lot with views of the Wando River. Just a few of the many features of this Charleston SC real estate include: private security gate with cameras opening to circular drive with abundant parking; impressive slate staircase leading to wrap around porch and front door; beautiful foyer welcoming you into the open and bright floor plan with gleaming hardwood floors; 10+ foot ceilings with intricate crown design; separate formal dining room; butlers pantry; huge eat-in kitchen with abundance of cabinets, granite counters, stainless steel appliances, and center island with bar seating; huge family room with fireplace; piano room with another fireplace; huge master suite with 3rd fireplace, spectacular marsh and river views, separate sitting room, his/her closets, and a spa like bath with oversized jetted tub and steam room shower; 3 huge bedrooms each with their own private baths; elevator shaft; large screened in porch overlooking the large private back yard and marsh. The location is ideal within minutes of I-526, Airport, Boeing, Beaches, and downtown Charleston.