Abberly Crest Blog

In the American mind, renting has long symbolized striving rather than achieving. But as we climb our way out of the Great Recession, it seems something has changed. Americans are getting over the idea of owning the American dream; increasingly, they're OK with renting it.

Home ownership is on the decline, and renting is on the rise. But the trend isn't limited to the housing market. Across the board, Americans are increasingly acclimating to the idea of giving up the stability of being an owner for the flexibility of being a renter. This may sound like a decline in living standards. But the new realities of our increasingly mobile economy make it more likely that this transition from an Ownership Society to a Rentership Society.

The unsentimental fact about the American dream is that Americans never really owned it in the first place. For the past three decades, especially, consumers haven't so much bought their quality of life as they've borrowed it from banks and credit card companies.

Now consumers are following the example of corporations, becoming more efficient. And it starts at home.

Housing is the biggest single component of consumption in the U.S. economy and the source of much of our present misery. The typical consumer spends about 32% of his or her budget on shelter. In the last decade, that generally meant borrowing a lot of money to take "ownership" of a home.

During the boom, the homeownership rate grew steadily, peaking at a record 69% in 2006.

Ownership-boosters failed to note that homes purchased in 2005 and 2006 with no-money-down, interest-only mortgages weren't really bought. They were simply rented until the "owner" flipped them or walked away from the mortgage.

In the post-bust climate, renting has emerged as a much more economically efficient way to pay for housing. A one-year lease represents a far less onerous financial obligation than a 30-year mortgage. It's difficult to get into too much financial trouble as a renter. The homeownership rate has fallen from its peak in 2006 to 65.4% today.
 
For an increasing number of Americans it makes more sense to rent. According to Moody's, by late 2011 it was cheaper to rent than to own in 72% of American metropolitan areas, (such as Southern Maryland) up from 54% a decade ago. And the more people who do it, the more socially acceptable and desirable it becomes. The decline in the ownership rate means that about three million more households rent today than did at the height of the bubble.

It's tempting to view the rise of renting as an economic step backward. But many would argue the rise of renting is a sign of a system adapting to new realities.

The U.S. economy needs the dynamism that renting enables as much as, or more than, it needs the stability that ownership engenders.

And the rising popularity of renting is hardly contained to the housing market.

Finally, perhaps, Americans are absorbing a piece of wisdom from Thoreau: "And when the farmer has got his house, he may not be the richer but the poorer for it, and it be the house that has got him."

For information on renting an apartment in Lexington Park, MD, contact Abberly Crest.

Wall Street Journal

Low mortgage rates and more affordable home prices in  Southern Maryland are creating an interest in home ownership by those who live in apartments. However, potential buyers who are unprepared for the true cost of owning a home may be shocked by the bite home ownership can take out of their wallet in addition to their mortgage payments.

Inspection and Appraisal Fees
Before you purchase a home you need to pay for a home inspection, and an appraisal, possible even inspections for pests or radon. The costs of these inspections are borne by buyers and are a necessary protection to avoid buying a flawed property or paying too much.

Closing Costs
Buyers need to be prepared with the cash for anywhere from 2% to 4% of the mortgage balance depending on your area.

Taxes
As a homeowner, you'll need to pay property taxes, which are generally part of the escrow you pay into each month. Remember, even if you have a fixed-rate home loan, your property taxes could go up and increase your monthly housing costs.

Insurance
Your lender will require home insurance, the cost of which depends on factors including the construction materials of your home and the location. Even if you have renter's insurance, you'll find that home insurance costs more because you are paying for the ability to rebuild your home in addition to replacing your personal possessions. Insurance costs will rise over time, and you will need supplemental insurance if you live in a flood zone.

HOA and Condo Fees
If you buy a home within a homeowners' association or a condominium association, you'll be required to pay a monthly or quarterly fee. These fees can rise, or your association may need to charge a special assessment for projects such as repaving the parking lot or repairing a roof.

Utility Bills
Depending on where you live, your costs for electricity, gas and water could be higher when you move into your own home than when you live in an apartment in Lexington Park, MD. You may also need to pay for garbage collection along with your Internet, cable and phone bill.

Furniture
While this is essentially a discretionary expense, most people who move from an apartment to a larger home need to buy at least some new furniture.

Lawn Care
Whether you handle your yard work yourself or hire a professional, you will have to pay something to keep your landscaping in check. Lawn equipment can be costly and you may need a leaf blower or other yard equipment, too.

Maintenance
Home maintenance costs time and money. While you may be able to change your furnace filters, clean your gutters and keep your appliances running smoothly yourself, you may also need to hire a contractor to clean and inspect your chimney and to keep your heating and air conditioning system in top shape.

Repairs
While maintenance tasks can be predictable, the most costly part of home ownership typically comes with unexpected repairs such as replacing or repairing the roof, removing a tree, or paying for mold mitigation in a damp basement. The list of possibilities is endless, so homeowners should set aside savings for an emergency. Experts suggest budgeting for 1% or 2% of your mortgage balance as a yearly maintenance and repair fund.

The Bottom Line
Buying a home costs more than you think. If you don’t expect to stay in your home for at least seven to 10 years, contact Abberly Crest Apartment Homes.

SF Gate

That is what smart money columnist advises. Forget the conventional wisdom about renting. It turns out that renting is one of the smartest investments you can make.

In fact when economists run the numbers they find that renters save an average of $560 every month just by choosing to rent over buying a house.

And don't worry about losing out on the investment potential of a house. Renting an apartment allows you to use your "down payment money" for other investments, which provide a higher return than real estate, even in a booming housing market.

As a case in point, a $100 investment in housing in 1985 would be worth $293 today, while that same $100 placed in stocks would be worth $1146 - nearly four times as much.

When you add up all of the potential liabilities of home ownership - hidden maintenance and insurance costs, rising property taxes and potential price drops - renting is a smarter choice from the start.
 
Live smart; rent from the leading apartment home community in Southern Maryland. For more information on apartments in Lexington Park, MD contact Abberly Crest Apartment Homes.

National Multi Housing Council

America is headed toward a future in which fewer people own their homes. The effective homeownership rate stands at 62% percent, according to a 2010 report by the New York Federal Reserve.

As more people move from owning to renting, apartment vacancy rates have fallen fast, from 8 percent in 2009 to 5.6 percent in third quarter 2011. Apartments in Lexington Park and all over Southern Maryland are not exception.

Those trends are just the beginning, the US is becoming a nation of renters and home ownership will keep falling. And some experts say that could be good for the country.

This dramatic change, triggered by the 2008 housing collapse, has shifted people’s views of home ownership. The number of those who consider a home a safe investment fell from 83% in 2003 to 66% this year, according to a survey by Fannie Mae. In another poll last April, 40% of renters questioned said they plan never to buy a home. Another reason for this is that many baby boom retirees don’t want the burden of home repairs, rising property taxes and other responsibilities.
 

For information on renting an apartment in Lexington Park, MD contact Abberly Crest Apartment Homes.

Original article- the Fiscal Times

Many people are told when they are younger that renting is only for college graduates or people who cannot afford to buy.  Many parents hammer these ideas into their children and tell them that renting is equivalent to throwing money away every month.  Fortunately, today people are beginning to finally think for themselves and challenge these ideas.  Here are 4 reasons to pat yourself on the back for deciding to rent an apartment in Lexington Park, MD at an HHHunt Community!
 
1.  Renting can save money

At the very minimum you’ll be shelling out PITI for your home. That is:

1. Principal
2. Interest
3. Tax
4. Insurance

The PITI doesn’t include property maintenance like maintaining the yard, paint, plumbing, repairs, decorating, etc… When you rent an apartment in Lexington Park at an HHHunt community, the monthly payment is almost always quite a bit less than the PITI in your area and there are no maintenance expenses!

2. Homeowners’ tax deductions are overstated

According to research quoted by MSN, “… half of homeowners don’t get a break, because even with mortgage interest and property taxes, their total deductions do not exceed the standard federal tax deduction ($11,900 for couples and $5,450 for singles)”.

For these folks, it’s like spending $100 to save $20. They’re better off saving the difference and investing it.   Even if there is a “break” on your taxes, you typically had to spend more than you would have spent to rent to get back that $20 for every $100 spent in interest payments.

3. Renting gives you flexibility

For the up and coming young professional, you’re better off renting and saving for a few years than to buy a small condo. Who knows how fast you will outgrow it?  When you own a home, you can’t always sell it when you need to sell it at the price you want to sell it in order to accept a new employment opportunity.  If you have owned a home and don’t want the constant maintenance responsibility, renting gives you the opportunity to enjoy your weekends instead of completing that “to do” list.

4.  Our superb service teams!

Most apartment communities offer 24 hour emergency maintenance and technicians who are skilled in HVAC, plumbing, and electrical.  At an HHHunt Community, our service teams take great pride in offering prompt and professional service to you.  Whether you need a light bulb changed or a new compressor for your AC unit, we are there to take care of you as fast and efficient as possible.  We are always a phone call or email away and most service requests are performed on the same day or within 24 hours!

The housing market is stagnating right now and real estate brokers would have potential buyers believe that there is no better time than the present to buy a home. It is true, prices are down and mortgage rates are at all-time lows.

Unfortunately for the real estate brokers, many clients are not persuaded by that logic. Instead, in increasing numbers, they are choosing to rent instead of buy — unconvinced that the housing market has yet hit bottom. Would be buyers also understand that unless you plan to stay in your home for more than 10 years, buying a home may not be the right investment for everyone.

With apartments in Lexington Park, MD , located near the Patuxent River Naval Air Station and St. Mary’s College, offering apartment amenities that can’t be found in homes, renting is a great option for many. There is also a broad mix of tenants at Abberly Crest Apartment homes: young single residents and families and empty-nesters that no longer have homeownership on their wish list.

For information on beautiful one-, two-, and three bedroom apartments in Lexington Park, MD contact Abberly Crest.

One of the most popular home ownership myths in Lexington Park, MD is that owning a house is a huge tax break as compared to renting.  I don’t know how many times people have personally told me that they want to buy a home because they NEED a tax deduction!  I just shake my head in disbelief because I have done the math.  

If your mortgage interest and other qualifying expenses such as charity contributions aren’t more than the standard deduction, ($11,600 for joint filers in 2011), there is no tax advantage to owning a home as opposed to renting an apartment in Lexington Park, MD.  Assume that you buy a $200,000 house with a 5% downpayment at a 6% interest rate.  Your mortgage interest for the year would be $11,336.  The Standard Deduction for joint filers is $11,600.  

In this example, there is NO TAX BENEFIT.  Even when there is a tax benefit, you most likely paid much more money to maintain the house than you are saving in taxes.  If your mortgage interest is more than the standard deduction and you choose to itemize, there is little to no advantage.  

For example, assume that your mortgage interest in 2011 is $15,000.  You would get to deduct an additional $3400 if you itemize BUT you spent $15,000 in mortgage interest to save $850 on your taxes (assuming 25% tax bracket).    

Don’t forget that you would also have all of the other expenses of home ownership that you would not have incurred when renting an apartment in Lexington Park, MD in an HHHunt community.

Although there are many reasons why people can tell you to buy a home, the decision to buy or rent a home depends on your personal situation; who you are, where you are, your career, your financial goals and how you want to spend your time. There is a prevailing thought that everybody should buy their own home. But research shows there are times and circumstances when renting might be a better idea.

Do you have the time?

There is no such thing as a sure thing in any investment. Usually what makes real estate a better risk than some investments is time. The longer you commit to a property, the better your chances of seeing its value appreciate.

If it is likely in any way that you will move, change jobs or stay in the house for a short period of time, less than 10 years, buying may not be a good idea. Letting go of a property before it has appreciated enough to cover the costs and commissions is not fun and if you bought with less than a 10% down payment, it could be costly. Fees and closing costs can wipe out appreciation gains, if there were any. If the purchase was made with an even smaller down payment, chances are you'll come out at a substantial loss.

Will you like the neighborhood?

If you are new to Lexington Park or Southern Maryland, take ample time to get to know the area before investing money in a house and its neighborhood. If you are relocating to a place you hardly know, spend a year in an apartment in Lexington Park until you're certain where and how you want to live and that you are going to stay at your job.

Will you be happy giving up the freedom?

Initially renting is less financial pressure than buying. Paying a first and last deposit doesn't compare to the big chunk of change required for a down payment on a house. If you do have enough savings for the down payment, you could invest it elsewhere and hope for significant capital gains. Imagine if you'd invested a typical down payment amount in the stock market ten years ago.

Renting gives you the freedom of time as well, with no yard or home maintenance projects. Natural and other disasters make renting a home a lower risk.

Even though rents tend to increase by 3% per year, unexpected maintenance costs or sudden property tax hikes will not affect you as a renter.

Relocating to Lexington Park, MD? You should look at Abberly Crest Apartments.Contact us to find our more about our online specials.

If you are relocating to Southern Maryland, you should consider renting and apartment in Lexington Park, MD. Renting is a great investment.

Abberly Crest Apartment Homes would like to share with you some common home ownership myths that have been dispelled.

“Owning your own home is a forced savings plan.”

If home buying is like a savings plan, it’s probably not a very good one. Would you voluntarily sign up for a savings plan where well over half of the money you deposit in the first 20 years simply vanishes, and from which you can only withdraw money by relocating and paying a 6-9% fee (not on the amount you have “saved” mind you, but on the total sale price of the home)? Of course not. That doesn’t sound anything like a savings plan.

If our potential home buyer has that $85,000 saved up for a down payment and deposits it along with just half of the monthly savings over buying ($578 per month) into an account you will gain quite a nest egg in 10 years. That’s a liquid investment that can be used for whatever you want, no relocation required. Buying a home is not a savings plan. Actually saving money every month is a savings plan.

“Home ownership is an excellent path to build wealth.”

If your goal is to build wealth, you will be much better off renting and investing your money in the stock market than buying a home. While both stocks and housing are cyclical markets, long-term historic trends show that housing appreciates at a rate barely above inflation, while stocks tend to return an inflation-adjusted 7-10%. In a hypothetical scenario, a renter who invested in the stock market with the $85,000 down payment plus the monthly difference between the $1,515 rent and the $2,690 home-buying costs would be over $500,000 better off after 30 years than the homebuyer, assuming 4% average appreciation.

Keep in mind too, in order to cash in on any “wealth” you build through your home you will need to sell that home and move. No, “extracting equity” does not count, since that simply results in a larger debt. Debt is not equal to Wealth.

Do your research and come see us. You will like what you see. Excerpts from Getrichslowly.com

Many people can tell you a list of reasons why you should buy a home. But as with everything else, it depends on who and where you are, in your life as well as your career. Despite the prevailing assumption that everybody, everywhere should settle down and buy their own home, research shows there are actually times and circumstances when renting might be better than buying.

Will you put in the time?
In any investment, there's no such thing as a sure thing. What usually makes real estate a better risk than most is time. The longer you commit to a property, the better your chances of seeing its value appreciate.

If it is likely in any way that you will move, change jobs or stay in the house for a short period of time, buying may not be a good idea. Letting go of a property before it has appreciated enough to cover the costs and commissions is not pleasant and if you bought with less than a 10% down payment, it could be brutal. Commission and closing costs will likely wipe out appreciation gains, if there were any. If the purchase was made with an even smaller down payment, chances are you'll come out at a substantial loss.

Will you like the neighborhood?
If you are new to Maryland, you should take ample time to acclimatize before investing money in a house and its neighborhood. If you are relocating to a place you hardly know, spend at least a year in an apartment community until you're certain where and how you want to live.

Will you be happy giving up the freedom?
Initially at least, renting is less financial pressure than buying. Paying a first and last deposit doesn't compare to the big chunk of change required for a down payment on a house. And even if you have enough savings, you could invest it otherwise and hope for significant capital gains. With current market volatility that may not seem prudent, but just imagine if you'd invested a typical down payment amount in the stock market ten years ago.

Renting gives you the freedom of time as well, with no yard or home maintenance projects. Renting is also lower risk because natural and other disasters the problems of the landlords.

Even though rents tend to increase by 3 percent a year, unexpected maintenance costs or sudden property tax hikes don't concern you either.
 
Relocating to Southern Maryland? You should look at apartments in Lexington Park, MD. Original article salary.com