Are you thinking about owning a home but don’t know if it’s better to rent or buy? In this episode of Brainerd Redefined, I’m going to show you why renting is the same thing as throwing your money away. We’ll look at some common misconceptions people have about homeownership so you can see if it’s possible for you.
Can You Afford To Buy?
Do you love to ice fish? Imagine getting that auger, drilling a hole, putting $100 bills down the hole, and then letting it freeze back over. That money will never be found again. Would you like that? Of course not. Then why are you renting versus buying in today’s real estate market?
I know you’ve all heard the news and read the newspapers where in today’s real estate market, it takes your right arm, your left kidney, and your left lung to be able to buy just a camper. You probably think becoming a homeowner just isn’t in the cards for you. Newsflash: you are completely wrong.
Last year, 39% of all homebuyers were under the age of 40. Those are Millennials by the way, aka the group of people that the public said would never be able to buy a home. It’s very clearly doable, so what’s holding you back?
The Down Payment
We usually hear from people that it’s too expensive to buy. They’ll say they can’t save up $50,000 to put 20% down on a new home. However, what if I told you that putting 20% down was a total misconception?
There are some great loan programs out there in rural Minnesota where you can buy a home with 0% down, though there are some income qualifications and some restrictions. There are other programs where you can buy a home for as little as 3.5% down. So the misconception that you need 20% down just isn’t the case in today’s real estate market.
Mortgage VS Rent
So now that you figured out you can afford the down payment, another thought may have crossed your mind: how the heck am I going to be able to afford the payment, property taxes, and utilities? It sounds like a lot of noise that nobody wants to deal with.
The average rent in Brainerd is between $1,000 and $1,200 a month. What’s interesting is we’re seeing rent values substantially higher than it would be to own that same property—and that doesn’t even include utilities. For that, you have to add at least another $200 to your monthly expenses. To give you an idea, the average home price with utilities and taxes is going to be less than the rent price.
If you’re looking at a $150,000 home, your payment will be less than what your rent price would be. The benefit is that now you’re building equity. We’ve seen prices in the Brainerd Lakes area absolutely skyrocket in the last 24 months, with prices increasing on average between 40% and 60%. People are walking away from their homes and selling a property they bought two years ago, putting tens of thousands of dollars in their pocket.
Now Is The Time
Unlike your rent, your mortgage payment doesn’t go up year after year. With interest rates at historic lows and with rumors that the Feds are going to start increasing rates in the upcoming months, there is no better time to get with us and try and find that perfect home.
Remember, buying a house in 2022 isn’t a pipe dream. If you have any questions about the first steps of getting started, feel free to reach out to me and I’ll be happy to help. Before you pull the trigger on your very first home, make sure to check out our other videos for more information.
Don’t forget to subscribe to our channel so you never miss an episode of Brainerd Redefined, where we talk about everything there is to know about the Brainerd Lakes area. Stay tuned to see what I feature next!
