The Benefits of Buying vs Renting
This is the Treu Real Estate 911 Podcast with Lisa Treu. Lisa will share up to date real estate information with you that you need to know.
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Welcome the Treu Real Estate 911. It's Brian Mudd, along with your local real estate pro, Lisa Treu.
And we've been telling you for a long time about the benefits of buying versus renting. We have the best information that has ever been made available is that I'm saying that we're going to be able to share with you during the course of today's show. And Lisa, you know when we talk about the benefits of buying versus renting historically. Under almost any scenario we've seen that if you're going to see in place a minimum of three years it works to your advantage but some of the information we're going to share during the course of today's show it puts no one but probably multiple exclamation points behind that.
It's interesting. Landlords buy real estate and put tenants in there in order to build wealth, right? So you know if that's the case the first thing you need to do to build your own wealth is to own your own home and then hopefully buy additional properties. 83 percent of all properties and of all wealth comes from real estate. So most people just don't have this information and didn't even know it's possible to be a homeowner. And so I'm very excited about today's show.
And as we get going If you're not already there, go to treurealestate911.com. That is treurealestate911.com. And when you go there, you're going to find the best local resource real estate available including the ability to search the MLS in real time like real estate. And the truths are always ready to help you buying, selling just as a resource if you have questions seven days a week at (561) 972- 8326 that is (561) 972- 8326. And as we're talking about this really great information well it had been provided by mortgage partner of the Treu group from Cross Country mortgage. We're joined now by Avi Mizrahi and Avi appreciate you taking the time with us today. On some of these buying versus renting outcomes that you present when we were taking a look for example at just the average property in Palm Beach County the difference and being able to buy versus rent over seven years is nearly a hundred thousand dollars’ worth the difference. That's huge.
Yes Brian and thank you so much for having me. You know the numbers are astonishing when you really think about the common misconception out there that it would cost so much to own a home and you know I could just never afford it keeping a lot of people away from such a great investment when you really break down the numbers in today's environment. Not only it cost to own a home less than renting on a monthly basis but when so many factors come into play as you mentioned over seven years where we had over a hundred thousand dollars in net worth adding to someone just by owning over renting. And it cost them less every year.
Yeah. I mean when you're talking about the value proposition. There are a couple things there. One of the misconceptions that come into place like just can't afford it. And Lisa this is something that you've addressed very well. Not only is there the ability often if you have first, last and security for example but these days there are often many products are available with no money down.
Yes there’s some exciting options for people that don't have the down payment. Maybe they have that first last and security to go towards closing costs. And we've even been able to help people get the seller to pay part of their closing costs. So lack of money should not be the reason that you don't pick up the phone. Let's have a conversation and see what you can do. And if maybe you do need a little bit then you can go ahead and create the strategy so that you're not in the same place next year when it's time to renew that lease again. However out of the 460,000 people that are renting, a quarter of those can go ahead and buy a home today. And so if you're listening and you're a renter you know your odds are pretty great that you can be a homeowner and not have all the downside that comes with being a tenant.
Hey no audio and I talk about this sometimes and I'm thinking about it. Hearing Lisa describe what goes on. Sometimes people say oh my gosh you know I don't want to have to deal with and you know pay for all those things that you have to pay for when you own a home. Well the truth is you really do when you're ready right and you're the only difference is you're being paid to the landlord. When you take a look at the value proposition the analysis that you've provided here or give us some ideas about you know what a mortgage payment looks like with everything included relative to a lot of the rent payments that are out there.
Of course, great question Brian. So in this scenario we brought forth here we looked at an average home value or a home price of three hundred thousand. Certainly below the median or the average selling price home is in Palm Beach County today. So we took the cost of owning that home and what it would cost for the monthly mortgage payment and then the insurance and the property taxes that would be associated so you add all those figures together. The total estimated payments to own a three hundred thousand dollar home would be just over two thousand two hundred fifty dollars per month. OK that's two thousand two hundred fifty dollars per month. When we look at the average rents that are out there, a good medium we use is the monthly rent being 1 percent of the value of the home. And so a three hundred thousand dollar home would on average rent for about three thousand dollars. Okay. And so huge difference when you look at what it costs to rent the home versus the monthly payments of owning that home. Now Lisa also mentioned a great that's out there that affords a homebuyer the ability to buy a home with a zero dollars down payment. So that's zero dollars down to buy a three hundred thousand dollar home. I'm going to give you a great number. OK. In Palm Beach County today there are over. And Lisa can confirm more specifics but there is over 4000 homes in Palm Beach County today that could qualify for zero dollars down payment. Amazing.
That is remarkable Lisa. How many of these people even have an idea.
I had an e-mail from somebody that received our flyer about her upcoming event and they said we have talked to three agents and they've all told me that I cannot buy a home because I don't have my deposit. I don't have a down payment. And the sad part is that they're getting misinformation and that is just one person. And I cannot believe that there's 110,000 renters in Palm Beach County that if they knew that they could buy a home with zero down and have their costs be less and their net worth be greater in seven years that they would not be buying a home today is that they don't know and that is why we're on a mission. Definitely. Cross country is on a mission to spread this news.