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That being said.
We're talking about trying to push this these properties we're talking about getting buyers out there but the question of the day now is should you rent or buy -- should you be buying a house you can't afford it.
Many will argue.
No friends -- particularly if it's okay.
You know this whole tax deduction it's -- more -- anything else I bust my butt keep my house from my silly deduction.
Did -- -- -- is that right.
Is here with -- she is the president of rent dot com.
Great website and -- that's -- about this because this is a big deal these days Sydney for a while it was in especially you know one.
Our parents were younger my mom it was the American -- you got on a home everybody seats every single penny and they did it right they put 20% down they pay their bills yet it's very different now.
It is different now so what do I have to think about.
Well I think there're couple things we need to think about your own personal financial situation homeownership could work it's always going to be a part of the American dream however.
If you can't afford it it's not the American -- And so it's important to think about your own personal both short term as well as long term financial situation.
Do you have enough money to cover the unexpected expenses that could come up.
And there are a lot of costs of homeownership that are not matter beyond just the cost of the monthly mortgage payment.
Verses the cost for the monthly -- -- And you try and -- -- budget for at all and -- and evidently missed something absolutely let's talk about though.
I mean lets you know he got -- cost -- announce it here as much as.
That sounds gay people it's not that typical right first talk about the -- ratio so the -- -- -- -- a proxy for determining whether or not even if you can't afford it.
It makes sense in a particular city neighborhood area.
To -- vs France and so it's as simple calculation where you just take.
Behind the home -- say a three bedroom home.
And you compare that to the annual rents and that same for that same similar home so if you had a 500000 dollar house.
And you're paying.
2000 a month so 24000.
You divide those come up with the ratio and experts vary as to where the tipping point is between renting and buying.
But typically they say.
Between fifteen and twenty is the tipping point so in the example I gave you the -- -- 21.
And so that would indicate that it's right on the border it may be more expensive to buy then -- -- -- ratios too high it's cheaper to rent.
It is because if the ratio is high the indicates indicates that this but you would have to have more of -- -- And the value of that home in order to justify buying -- like an extra six cents.
And then you go through on your own personal levels -- hours to figure out whether it's worth it to own or rent property yes and then you got there where you are.
Absolutely and that's the key -- I think some people -- all of these you know.
Studies out there about cities were extended by -- -- and that's great that's a great start but you also have to look at whether you can afford it personally.
And also whether your lifestyle supports wanting to own vs -- as you are hang yourself up for a longer committing yourself to a long way to -- -- -- closing -- things like that an upfront costs and inevitably you're -- the thing -- -- drugs whatever -- in I guess if you're at a job where you looking for a job you could be relocated in in time that's exactly right and that's one of the -- differently differentiating factors between say our parents -- we're buying.
They lived in the same city their entire life they had one job for twenty years.
They -- plan to raise their kids.
And with us that we may potentially move more often and you could end up having to sell and a down economy and suddenly you've lost money.
Simply wasn't good cities -- -- right now there are there are.
You know I think that and this has been historically the case because.
The way it works is typically where the home prices are extremely high those made the areas where you can get more for your money renting.
And so a perfect example would be Manhattan.
-- ratio there is to 26.
So it's more expensive.
To buy than it is to rent Santa Monica is another example.
Very high -- ratio -- indicates -- you may make.
More by keeping your money in the bank.
And renting paying the monthly rent and not having the cost of actual desktop sad to think as far as time right Mike we're stepbrother is probably dying -- is he just bought it.
Apartment for a billion dollars right so but it -- -- is that a meeting in his stay in it forever or I'm gonna keep it in the use it as a rental property.
Then we have to consider that in -- yeah that's absolutely key factor because of the fact that.
This whole movement of home prices you know the curve right on up down.
Doesn't matter unless you're trying to say I'll share it doesn't matter what the value of your home is if you're gonna live and it and you're saying there.
Well if you need to south.
Then you could end up selling and a down economy and then you may lose money and so how long you feel like you're gonna stay and it is absolutely -- back and -- that's hard to determine and you do the best you can but it do you think that's -- important -- for every one is that.
Many times -- at my house is underwater.
But does it matter if you're not it's not for -- exactly right and I think that's there's a lot of people and that's why I think we have a lot of people walking away from mortgages and you know blown it off his thinking well I'm under water what does it why bother -- She didn't even need to move right especially if the plan when you -- when you couldn't really afford it.
What's the flip it and two or three years and then people were burned because two or three years later.
Here adjustable rate is about to change and a great house is underwater and now -- -- why am I can continue to pay a mortgage on something that isn't worth what it was -- doesn't matter you're planning on living at yeah exactly.
So are you seeing a lot of traffic these days to the website we are or were actually having on year over year increase in traffic I think people even -- they can't afford the -- saying I would rather rent now.
I have more flexibility.
I know that -- appreciation is not guaranteed.
And I'm fine living exactly where wanna live and -- so traffic events from before I let you go do you also talk about -- owning second homes.
On the site.
We what we rent out -- we have property owners that rents their second -- their first homes because that's different calculation I would think -- when considering whether or not to -- second house right it will because -- when you're buying a second house.
Com and left it's four.
Going on vacation every single year it's usually viewed as an investment and then you have to evaluate the same way you would evaluate any other type of investment any other stock.
And there are risk factors to that.
I am I from I give props to people that can -- more than one -- kinda I can't figure of one.
And then and it's amounted the same -- every at bat companies.
I did have a website went dot com Peggy -- our president at -- dot com thanks so much finish -- -- -- -- thanks for I think it's important I think people realize that.
It's not like a scarlet letter.
You know has -- -- style could you rent instead of not that big a deal.
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