Hello. Decisions, decisions.... Well of course there are some obvious adnamtages to buying. 1. Protection against rent increases. 2. Tax benefits. 3. Equity. 4. Your not helping someone else increase their wealth. That being said, sometimes it is better to lease if you are not ready to buy. You DO NOT want to buy the wrong home. Rents in Austin are increasing and depending on the area your rent could be competitive with what you can get a mortgage for. Ultimately, I would recommend you consulting with a mortgage pro to determine if it is more financially feasible for you to buy.
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If you put enough money down, OF COURSE you will get the total costs low enough that a property will cash flow. But you should get a good return on that "down money" or it's a crappy investment. If a home purchase requires 30 or 40% or even more down just to break even on costs, then it is silly unless you expect huge price or rental appreciation in the near future. I wouldn't dream of making that bet at today's home prices.
I hope not to offend you, but your training involves listing homes, showing buyers around, guiding buyers and sellers through home transactions, that sort of thing. In those areas I am sure you know things that most people like me don't. However I do not believe a real estate license qualifies you to give advice on rental economics and certainly not in making comparisons to the stock market. That is a line that too many realtors cross these days.
Also it is generally not true anymore that renters pay the mortgage of a landlord. It worked in the old days when rents were high enough to cover the landlord's mortgage, taxes, insurance, maintenance and depreciation. The landlord could sit back and get rich off home price appreciation. With the prices people paid for homes during this bubble, they are mostly subsidizing their renters' lifestyles. They are in a very difficult position and there is no easy way out.
Please feel free to contact me with any additional questions
1) Austin peaked a lot later than most markets so it is in the earlier stages of decline. Not saying it is going to keep falling for the next 2-3 years or even longer, but it is very possible.
2) Unemployment will rise with the upcoming state and municipal government cutbacks (they are big employers).
3) Austin has seen three very bad months of sales in a row, following the tax credit expiry. Inventories are at record levels. You would think the very high number of withdrawn listings would keep inventory down but there are obviously a lot of sellers out there. Unless a wave of buyers shows up in the next six months, prices are going to have to ajust down.
4) Be wary of folks who sell you on the tax benefits of home ownership unless you're talking about a big mortgage. If you're buying below $200k then your standard deductible (the deduction you get automatically if you take no other deductions to your income) is probably going to be higher than your mortgage interest anyway. In other words, it won't do you any good. Check with your accountant on this.
Good luck in your decision.
It's a matter of what best works for you. If you have the credit along with the down payment, & you are waiting for the rates to go down further, or pricing to go lower I don't think that is the best course of action. In the latest market statistics, Austin homes values are trending up, though the volume sold is lower than compared to last year.
It is really a great time to buy a home.
Rates are the lowest we'll ever see, sellers in all price ranges are motivated to sell, your mortgage interest is still tax deductable... I'm curious about what's behind your answer so let me know if you'd like to discuss!
Keller Williams Realty
We're headed to slower sales months in Nov-Jan. Keep an eye on the market in the areas you like then jump on one that fits and has value in those months and negotiate a good deal.
Not sure what area you're looking but if it's in Western Travis County, ie:360 west to the lakes, I can help most in those areas. 512 751 5996.
All the best,