Today I was browsing the rental ads for around the Greeley/Evans real estate home market area. From what I saw it appears that rental rates for a 3 bedroom house are somewhere around $1700 a month. More or less depending on the house itself and the location. Plus one should probably add rental insurance to that.
So what would it cost per month to own one of those homes instead of renting?
The average price of an average 3 bedroom home is about $250,000. Currently the interest rate is about 4% and if going with an FHA loan they require 3.5% downpayment. Which out of $250,000 would be $8750. There are programs to help with that downpayment also. These programs are really just small loan programs. Loan closing costs to get that loan would probably be around $6000 or so also. And after that you would have a monthly payment of about $1182 a month. FHA requires mortgage insurance so add another $150 or so a month. That is if you chose a 30 year mortgage. A 15 year mortgage would pay it off much faster, but then a higher payment. If you own a house you have to add about $150 a month for taxes, You will have to pay water where most rentals you don’t. So figure another $100 a month. You would have to have home insurance so figure another $200 a month. I also highly recommend putting away another $200 a month for future repairs. So to own a $250,000 home the monthly payment on a 30 year mortgage plus expenses would be about $2000 a month. Renting would be about $1850 depending on the house. These are just estimates. Each property and person is different.
Plus I don’t like using this as it seems to be the way real estate brokers like to sell people houses. But for now we have a tax deduction for mortgage interest. Though I would consider that kind of a bonus and not really a good reason to buy.
The reasons to buy from my point of view is that the payments on the mortgage shouldn’t go up. Rent can go up. How many times does a landlord offer to lower rent? To get lower rent a person usually has to move. Landlords can kick a renter out after the term of the lease is up. Some landlords don’t keep up properties as they should (many home owners don’t either). So possibly owning a home can be more stable for a person. More freedom on what you do with your property. If you want to upgrade the kitchen you can. If the basement isn’t finished you can finish it. You can do those things as a renter sometimes, but you will be upgrading a property that is not yours.
Why would someone want to rent? First some people are not capable of owning a property. There is more responsibility to owning then renting. Mostly regarding upkeep. If someone is moving to the area quickly and would have to make a quick decision to buy something without really knowing the area I quite often recommend renting for 6 months to a year. Get to know a place. Get to know the neighborhoods, the schools. Then take time finding a place to buy. Because under $250,000 for a house these days a home buyer doesn’t have time to make much of a decision. If a person has the type of job that moves them around the country every 2-3 years possibly renting is a better idea also. If you rent you don’t have to worry about your property losing value and falling less then what the mortgage payoff. Right now we are at very high property values. A home that cost only $120,000 6 short years ago is now $220,000. For those that bought 6 years ago it’s great. Kind of. They could sell and realize quite a gain. But if they want to buy something else it will be expensive also.
I don’t pretend to know where the real estate market is going to go. I won’t say that it will always go up. We know that isn’t true. In fact there are mortgages out there that are very similar to the risky loans that were offered in 2006 before the housing crash. Also we have found it interesting lately that the people that could barely qualify for a $130,000 loan 6 years ago now can magically qualify for a $240,000 loan now. Incomes haven’t gone up that much across the board.
We are not the type of agents to try and talk you into buying or selling a property. We like to provide the right information to you so you can make the best decision for you. If it is to rent it is to rent. If to buy we will help you find the property that best meets your needs and guide you through the process as easily as possible.
If you have any real estate questions give us a call. Marc 970-302-1233 or Yarie 970-381-5356. Or send us an e-mail.
January 25, 2017
What is a days on the market report? It tells you how many days on the market before closing. This includes the time it is under contract as well. Including if one more more contracts are made then failed as well.
So for this little report I’m going to focus on the Greeley/Evans Colorado real estate market. The first price range is below $200,000 for a single family home over the last 3 months.
91 homes under $200,000 sold in the Greeley/Evans market between October 25, 2016 and today. This includes mobile homes, 1 bedroom homes, 5 bedrooms homes. It does not include town homes, condos or other attached homes. The average time on the market is 57 days. So given the amount of time it takes to get a mortgage these days I would guess that it takes on average about 10 days for a home to go under contract.
The next price range we will look at is from $200,000-$400,000.
There were 306 homes sold between $200,000-$400,000 in Evans and Greeley. That also shows you where most of the home prices are at. The days on the market are 77.5 days on the market before closing for this price range. I won’t go into the reports deeper, but I suspect the higher days on the market is more from the homes priced from $300,000-$400,000. That is because as the price of a home goes up there are fewer buyers for those properties and generally also more of a choice between homes at this time. Though on average 77 days on the market still isn’t that bad. Just a few years ago it was much higher. Also just a few years ago some of these properties priced at $200,000 were priced at $125,000.
This is just a quick snap shot. Lots of things can determine the market price for a property. Location, features, condition, style. If you would like a free market analysis on your home visit. Just fill out a Valuation request form Here.
Or simply call Marc at 970-302-1233 or Yarie at 970-381-5356.
This is a whole new website for Y & M Real Estate. We haven’t had a good website for about 2 years I think. Previously we had a web provider that was awesome and through some work we were able to dominate search results for certain real estate key words. Regularly beating much larger real estate companies who spend lots of money to get search results. However while that company was good at what they provided for users they were not good at handling money so they went out of business. Internet search results have changed and is much different then even 4 years ago. We had been searching for as good as a solution but I guess we still haven’t found it. But this website provided by iHomefinder might come close. We will feature an excellent property search on this website which runs straight from our MLS system. In addition to our Facebook page. Probably many of the posts here will be similar to whats on the Facebook page. Plus we will have featured listings from certain communities.