Get out of the rent trap
Just like many people, I was once a tenant. Like them, I dreamed of owning a home but couldn't find the courage to act and realize my dream. For years, I paid monthly rent to the owner of a huge apartment complex.
At first, it felt okay to live in the well-maintained complex. It had a huge swimming pool, several laundry rooms, and it was near the school and the church. But as the children grew up and we purchased more furniture and appliances, the apartment seemed too cramped.
When the children learned to drive, we had to buy additional cars, and parking became a problem because there was only one parking slot for every tenant. Once, my daughter decided to throw a party on her birthday, they had to barbecue in that small patio, and some guests had to stay outside. And when it was way past 10 p.m. and they were still partying, the apartment manager knocked on the door to complain.
But these problems of having cramped quarters, and lack of privacy is nothing compared to the problems of other tenants.
Take the case of one Jo Bessell, an elderly woman who has lived in the same apartment unit in Newport Beach for 28 years. When she first rented the unit, she paid only $275 per month. Through the years, the rent steadily climbed to $1,160 per month.
Then last year, the apartment complex was sold to another owner, and the rent was raised by another $465, making her rental payment a staggering $1,625 per month! The increase from $275 to $1625 over a period of 28 years represent a 21% average increase per year, or a staggering 590% over 28 years! The 83-year-old woman is now paying more than two-thirds of her monthly income from Social Security and mutual fund dividends on rent.
The poor woman is left with only two choices -- either to pay the higher rent, or move out.
At least, the poor woman had two choices. What if the landlord says his daughter is getting married and will need the unit or house that you are renting at the end of your lease? There will be just one choice left -- to move out!
Many people are caught in the rent trap, making their landlord rich with their rents and yet not having control over the way they conduct their lives in their rented homes or apartments, nor over the length of time they can stay in these dwellings.
Since you will be paying money for living in a home whether you own or rent it, doesn't it make sense to be the owner?
Just imagine the benefits of home ownership against renting, and you should be planning by now to buy that first home of your dreams.
By owning your own home, you control your life. You can barbecue and party with family and friends anytime you feel like doing it. You can paint your house red or orange for all they care. You can remodel your kitchen to your liking, replace the front door, add a bedroom or a den, or plant tomato in your backyard.
Nobody can tell you to move out of your house, unless you default on your mortgage payments.
More importantly, you build equity and derive additional benefits from appreciation of your property. In addition, you earn more savings because your mortgage interest payments and property tax payments are deductible for income tax purposes.
These financial benefits - building of equity, appreciation of the value of your home, and tax deductions -- should be worth the difference between your monthly mortgage payments and monthly rentals.
By buying a home, the monthly payment you make to occupy a home becomes an investment, instead of rent.
Imagine if Mrs. Bessel had instead purchased a house 28 years ago even at a monthly mortgage payment double the initial rent he had to pay. Assuming she availed of the 30-year fixed rate, she would still be paying less than $600 a month, and she would have paid off her home loan in two years! And the house she should have purchased would now be worth over $1 million considering that it is located in Newport Beach, a known enclave of the affluent.
Anyone who has had the courage to take control of his life and bought a house would tell you owning your own home makes a lot of sense.
A real estate professional can help you realize your dream and get you out of the rent trap. Talk to one now.
Val G. Abelgas is a real estate professional with Century 21 Excellence, based in Whittier, CA. He may be reached via e-mail at valabelgas@aol.com
At first, it felt okay to live in the well-maintained complex. It had a huge swimming pool, several laundry rooms, and it was near the school and the church. But as the children grew up and we purchased more furniture and appliances, the apartment seemed too cramped.
When the children learned to drive, we had to buy additional cars, and parking became a problem because there was only one parking slot for every tenant. Once, my daughter decided to throw a party on her birthday, they had to barbecue in that small patio, and some guests had to stay outside. And when it was way past 10 p.m. and they were still partying, the apartment manager knocked on the door to complain.
But these problems of having cramped quarters, and lack of privacy is nothing compared to the problems of other tenants.
Take the case of one Jo Bessell, an elderly woman who has lived in the same apartment unit in Newport Beach for 28 years. When she first rented the unit, she paid only $275 per month. Through the years, the rent steadily climbed to $1,160 per month.
Then last year, the apartment complex was sold to another owner, and the rent was raised by another $465, making her rental payment a staggering $1,625 per month! The increase from $275 to $1625 over a period of 28 years represent a 21% average increase per year, or a staggering 590% over 28 years! The 83-year-old woman is now paying more than two-thirds of her monthly income from Social Security and mutual fund dividends on rent.
The poor woman is left with only two choices -- either to pay the higher rent, or move out.
At least, the poor woman had two choices. What if the landlord says his daughter is getting married and will need the unit or house that you are renting at the end of your lease? There will be just one choice left -- to move out!
Many people are caught in the rent trap, making their landlord rich with their rents and yet not having control over the way they conduct their lives in their rented homes or apartments, nor over the length of time they can stay in these dwellings.
Since you will be paying money for living in a home whether you own or rent it, doesn't it make sense to be the owner?
Just imagine the benefits of home ownership against renting, and you should be planning by now to buy that first home of your dreams.
By owning your own home, you control your life. You can barbecue and party with family and friends anytime you feel like doing it. You can paint your house red or orange for all they care. You can remodel your kitchen to your liking, replace the front door, add a bedroom or a den, or plant tomato in your backyard.
Nobody can tell you to move out of your house, unless you default on your mortgage payments.
More importantly, you build equity and derive additional benefits from appreciation of your property. In addition, you earn more savings because your mortgage interest payments and property tax payments are deductible for income tax purposes.
These financial benefits - building of equity, appreciation of the value of your home, and tax deductions -- should be worth the difference between your monthly mortgage payments and monthly rentals.
By buying a home, the monthly payment you make to occupy a home becomes an investment, instead of rent.
Imagine if Mrs. Bessel had instead purchased a house 28 years ago even at a monthly mortgage payment double the initial rent he had to pay. Assuming she availed of the 30-year fixed rate, she would still be paying less than $600 a month, and she would have paid off her home loan in two years! And the house she should have purchased would now be worth over $1 million considering that it is located in Newport Beach, a known enclave of the affluent.
Anyone who has had the courage to take control of his life and bought a house would tell you owning your own home makes a lot of sense.
A real estate professional can help you realize your dream and get you out of the rent trap. Talk to one now.
Val G. Abelgas is a real estate professional with Century 21 Excellence, based in Whittier, CA. He may be reached via e-mail at valabelgas@aol.com
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