What is better. Buy a condominium, a house, or rent an apartment. This is the problem facing anyone who wishes to make a change in their living arrangement. It is not an easy choice to make.
First take a look at renting an apartment. The apartment is owned by a landlord who, for all intents and purposes, is in business to make a profit. He or she builds an apartment building with the expectation that he can cover all of the costs of insurance, heating, water, hydro, superintendent, and maintenance and cover the replacement cost from the rent that is charged.
Now take a look at the condominium choice. A group of owners get together under the guise of the developer. The building is constructed and everyone moves in by purchasing an apartment. They do so by getting a mortgage on their unit. To cover the expense of operating the building they use a system called maintenance fees. That is a fund that all owners contribute to based upon the square footage of their apartment. Not only does it cover all of the costs of maintaining the building and grounds but it covers the replacement costs of everything as they wear out. There is nothing allowed in the fee for profit.
Finally we get to the house. A stand alone, detached structure on its own lot of land. You get a mortgage from your broker and buy the home of your dreams. You pay for all of the repairs and maintenance as they occur.
One way or another taxes will be paid by you one way or another. So what is best.
The condominium at first looks over-priced because the maintenance fees are based upon a span of 25 or 30 years. If you did due diligence with the detached house and put aside the same amount you would put aside while owning the condominium, less the management fees, you should end up with the same costs with either one. If there is a community center or a private golf course or tennis court or any other activity facility you need to decide just how much use you will have of those benefits. Remember, the costs of building these things and replacing same are included in your fees.
You may have a fee in your maintenance total of more than $100.00 per month just for things you may never use or take part in. Then again if you own the house you could easily pay more than $100.00 for a gymnasium, golf course etc.
One way to look at what is best is this. How long do you expect to live in what you buy. If you buy when the real estate market is at a low and sold after a few years when it was at it’s high you will possibly make a very nice profit. If you want to stay in your new abode for a long term of say 25 years, that huge profit you may make could disappear when you factor in the mortgage interest you paid over that time period. Now add in the 25 years of taxes, and repairs you made, or the condominium fees you paid. You do the math.
Now look at renting, long term. You pay the rent each month. You may rent with services thrown in like hydro, heat and water. A light bulb burns out, the toilet develops a leak, the kitchen tap starts to drip, no problem, call the super. The landlord pays the taxes, fixes the roof, replaces the furnace and the many other things that go out of kilter. You pay the rent each month. The day you decide to move out you walk away nobody gives you a penny.
If you look at the three, renting an apartment demands the least money outlay per month. If you calculate the cost of the house or condo, add in the interest, add in the maintenance over twenty five years and then deduct that amount from the selling price you will arrive at the profit/loss of the purchase.
Now assume you will rent an apartment and put the difference in cost between the condo/house aside each month into an investment account for twenty five years at a compound interest of 5 per cent annually. You will be shocked at the result. This result does not rely on an up/down real estate market to produce either.
Listed below are more articles related to the above article from the "Real Estate Investing" article category.
People interested in the above article "Condominium, House, or Rental Apartment - Should you Buy or Lease?" are also interested in the related articles listed below:
One of the easiest ways to save money on real estate is to buy bank owned foreclosures. These are a unique form of repo homes and are for sale in cities across the country. Homes are repossessed due to the previous owner's inability to keep up with their mortgage payments. These houses are available to the public through auctions and usually sell for much less than they would on the open market. The lending bank that repossessed the home will use the sale processed as a means of recouping their losses. Because of this, buyers can often buy homes for up to 50 per cent off market value.
During the process of selling or purchasing a house, there will probably be several kinds of documents that you will encounter. All will have different names and different uses and functions. Two of the most misunderstood documents are the warranty deed and the quit claim deed.
Looking for a home can be an overwhelming experience. It takes time, energy and most of all, patience. But searching for your next home doesn't have to be grueling. In fact, it can be a fun and exciting experience. Being realistic, disciplined and not allowing yourself to fall into one of the house-hunting traps can ensure you'll find a home that you love. Here are some tips for making your search easier and more enjoyable.
How does one determine when to sell a rental property investment? If you are going to buy rental properties - having a plan in place for the appropriate time to sell is important. I have worked with many individuals over the years and showed them how to buy rental property. There are many things that need to be considered when purchasing for investment purposes. There is also - definitely - a time to sell.
If you are considering Playa del Carmen real estate, one of the options you might consider is that of a fixer-upper home. Like many of the other areas, where expats can consider a Mexico home for sale for a renovation project, buying a fixer-upper must be done with some care to ensure that it will be a successful project. As far as the market itself goes, there are good indications in Playa del Carmen that it buying such a home will be a worth-while investment project.
Famous for its beautiful landscapes and exciting lifestyle, Miami is also known for having one of the best prices in the world to purchase houses or apartments. Having a heated up Real Estate market, the region has not been through the crisis in the industry that affected much of the United States. Taking advantage of the falling property prices and the appreciation of Real (Brazilian currency), people around the world are being lured to the U.S. to invest in the sector.
Making use of a comprehensive arsenal of promotional techniques for your property investing enterprise may appear to be much like practical to the majority of of you, however it is typically usually one site that regularly trips up brokers. There are many types of advertising which work for property investing. But in the search for what operates among the best and what will yield the highest returns on investment, real estate investment organizations every now and then set up too many eggs in one basket only to find themselves in big challenges.
