- 1). Understand this: when I as a landlord decide the monthly rental price of a house, I total the following:
- my monthly mortgage to own the property (estimate of $500)
- my insurance and taxes (monthly estimate of $100)
- my desired monthly profit beyond the above (at lease $100)
That's a total of $700. I also charge extra for pets, and I get a late fee if the payment is late. On top of that, I get to require a damage deposit of $500 before you even get to touch the keys. - 2). Now think about this: While you are paying me $700+ to live in my house each month, it is only costing me about $600 to own it each month. That figure would be even less if I lived in the property, as the property taxes and insurance would be less. If you were to own this same house, instead of renting it, you would have saved $1,700 after the first 12 months (deposit plus the extra profit you pay the landlord)! Plus, you would have invested your money in building equity, which is like money in a bank, that you get back when you sell the house. The government even helps you out at tax time by giving you rebates for home ownership!
- 3). Is this tougher than it sounds? NO. There are more houses on the market now than ever before. The interest rates are lower than ever before. You can use multiple first-time home buyer programs to eliminate any up-front costs to you when you buy (true zero-down programs that do not cost you down the line), and home prices are currently very low.
- 4). How do you start? Talk to a realty agent. Explain your desires and your lifestyle. Let them do the work for you and make suggestions. They can lay out options for you that can make the process very easy and enjoyable. Looking at homes that could be yours is really very fun and exciting. This is the American dream, and it is so for a reason: it is every family's first step to becoming financially solvent!
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