When should I buy?
Hi,
We will both be out with clients tomorrow, should be a busy weekend. I had a long conversation about whether it's the right time to buy with some guys I know today. These are all young guys in their 20's. One owns a home, and wants to leverage his equity to continue moving up. Good strategy. The others basically said, "should I buy now or wait?" Obviously the answer depends on each individual's personal situation, but the general answer is BUY NOW. We sit down with our clients to assess their situation to determine the best path for each individual.
The general thought to buy now is simple. If you're renting, typically you can purchase a home and after the tax benefits (consult an accountant) the payment probably wouldn't be much more than rent, AND you're building equity.
I have an old article that gives this example: say you have the opportunity to buy a property for $100,000 and the interest rate is 8% (I said the article was old). You say, I want to wait for interest rates to come down. One year later, the rate is down to 7%, but that home now sells for $110,000. Guess what, the payment is about the same, but you lost out on 10% equity growth!
This is a simple example but, it still holds true. If you keep waiting for greener pastures, you will miss out on a lot. Call us so we can assess things for you!
Adam Tarr and Sharon Kotula