Great News for landlords and first time home buyers

Landlords got some great news - renters? not so much!
First Time home buyers?
When it's cheaper to own than rent, that has to be great news!

It seems that almost daily first time home buyers are getting information that makes that buy vs. rent decision a little  easier. According to a new report released by real estate search site HotPads.com residential rental rates have risen 6.7% since June of 2010, far exceeding industry experts predictions.
We are seeing renters flocking to their chosen social networks, flustered that their landlord is screwing them over and are being met with the harsh reality that it isn’t their landlord, it is the entire market. (AgentGenius)
It’s estimated that rents in San Diego will rise 10% in 2011 alone.

So how do you know if buying is the right decision for you and your family?
Forget the financial part for just a minute and ask yourself if you’re ready to assume the lifestyle.
If you think you’re ready to settle in fand can handle the additional responsibility that comes with homeownership, then  you might want to use this handy tool to help analyze the financial part of your decision.

If you find two similar houses, one for sale and the other for rent and divide the sale price by the annual rent, you can call the result the Rent Ratio.
It’s a formula similar to the price-to-earnings ratio that savvy stock investors use.

In concrete terms, a rent ratio above 20 means that the monthly costs of ownership will exceed the cost of renting. Anything less the pendulum starts to swing toward home ownership. Anything less than 10-14 is clearly a buying sign.

But there’s more to the decision than just the monthly payment.

If your lease expires at the end of the month, how much would you need to move into your next apartment or housse?

In California a landlord, for an unfurnished rental unit can legally charge an amount equivalent to two months rent (first month plus security).
So if the rent will be $1500 you would need a minimum of $3000.

Will you be able to do that?  if so, check this out!
If you were buying your first home, using the California first time home buyer program you might be able to move for as little as 1% of the purchase price.

• Compare the rent ratio figures for Southwest Riverside County

For more information on how this program might work for you and your family

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