Renting in Today's Market: Strategic Choices and Advantages for First-Time Buyers

Ever wonder if renting might actually be the smarter choice in today's housing market? Discover the surprising advantages of renting as we navigate the complexities of soaring insurance costs, taxes, and maintenance expenses with our co-hosts, Jenny and Lauren. In this week's Move Worthy podcast episode, we unpack why renting has become an appealing option, particularly for first-time homebuyers who are wary of the current financial landscape. We shed light on the stability found in peaking rental prices in locations like St. Charles Parish, offering a fresh perspective on why some might choose lifelong renting and how savvy young buyers could strategically save until market conditions improve.

Join us as we explore the powerful concept of "testing before committing" when faced with life-altering decisions like moving in with a partner or purchasing a home. With an engaging and thoughtful discussion, we encourage listeners to gain a true understanding of personal habits and financial responsibilities by experiencing independent living. We affirm that renting remains a viable and intelligent alternative to buying, emphasizing the importance of situational decision-making. Connect with us on Facebook and be part of our vibrant weekly discussions every Monday at 10 am, where we are ready to answer your questions and share insights on the ever-evolving rent versus buy debate.

MOVE Worthy Podcast with Lauren Jones & Jenny Lendle. Together we have the experience to MOVE you forward!

Transcript

Rent vs Buy

Jenny Lendle 0:12

okay , we are back with number five , our fifth episode of the move worthy podcast with jenny , with Jenny and Lauren and today we're going to continue on with . Is it a good time to buy ? We left off talking about renting Rent versus buying . Is renting a good idea right now , or should you go out and buy that house ? I guess if you have an option like what are your pros and cons ? And I guess we'll fill you in with what we think our pros and cons are . So , lauren , I'm gonna let you roll with this .

Lauren Jones 0:52

So yeah , I think right now , um , with insurance prices being astronomical , even in some areas , taxes having significant increases , um , flood and homeowners being an issue , that actually renting is probably better right now than buying .

Lauren Jones 1:15

And you hate to say it . You know we kind of talked about the market really catering to investors right now and not necessarily catering to them , but they seem to be the only ones that are really kind of moving right now in in the market . Um , so the ones that are um investors that are buying rental properties , they're probably doing just fine . Um , you know , we looked at , we looked at numbers and if , if a buyer is going to go a , a first time home buyer is going to go and have a conventional loan put 10% down on a $250,000 house , they're looking at a mortgage around 25 or $2,600 a month with escrows . You know , with your insurances and your taxes right now . And if you look at the comps in our area , sure , your average three bedroom , two bath house rents for 1,900 some a little higher , some a little lower , but you're definitely getting off cheaper right at this point renting yes and no maintenance , I mean that's huge a big thing for for homeowners , for renters .

Jenny Lendle 2:24

They don't have to cover if there's a damaged roof , if the AC goes out , if there's a plumbing leak , things like that .

Lauren Jones 2:31

Some of those big ticket items .

Jenny Lendle 2:33

I mean I managed some property and we had to change an air conditioner out a couple years ago . I mean that's a huge expense that a buyer or a homeowner renter doesn't have to cover .

Lauren Jones 2:45

And regardless of the risk of something big like that happen . What were the numbers that we looked up ? On average or just on regular maintenance ?

Jenny Lendle 2:53

one percent of the home value in maintenance per year roughly , so I think 200 and something dollars a month if you consistently just did things to maintain your property and not a big ticket item like an air condition fail or a you know . So that's huge , that is huge , that is huge . I think we deal with a lot of rental properties we deal with property management we see the tenants purchasing houses .

Jenny Lendle 3:19

Some of those tenants have great credit yeah some of them make great money and they would prefer to rent . Yeah , I think some . I think there's a percentage of people out there who are just lifelong renters . That's what they wanna do . They don't wanna purchase property .

Lauren Jones 3:36

They don't wanna maintain the property , and that's completely fine .

Jenny Lendle 3:38

I could totally see the opposite side of that .

Lauren Jones 3:42

I can see that being a preference for some people I mean me personally , you know just from an investment standpoint , I don't know that I would ever recommend my client be a lifelong lifelong renter because I mean , at some point you're just throwing your money away . Um , but in today's market I I hate to say it it's not usually I would not usually say it's better to rent than to buy . But I'm feeling like it is .

Lauren Jones 4:08

Until some of this stuff settles down , I really think you'll do just fine renting . The truth is , a landlord can only rent their house for fair market value . So while the costs are just going up and up and up to be a homeowner , that landlord can't keep going up and up and up in their rental market . I mean , you can only do so much , especially in St Charles Parish . There is a lot of rental in this area . A lot of people do rent their properties . So there's a huge pool of homes that people are watching prices on . They're not going to go and pay $5,000 to rent a house that Joe Blow , two doors down the street , is renting for $2,500 . So I definitely think that homeowners or landlords right now are barely squeaking by . They're covering their expenses .

Jenny Lendle 5:10

Maybe a little bit left over .

Lauren Jones 5:11

Maybe a little bit left over . Maybe a little bit left over I think we've reached the max .

Jenny Lendle 5:14

I agree , we're pretty much at the peak of the max amount of rent right now , absolutely . In St Charles Parish at least .

Lauren Jones 5:21

Absolutely , absolutely .

Jenny Lendle 5:23

I don't think there's a lot more room left , and I don't foresee them going a lot higher .

Lauren Jones 5:28

Mm-mm .

Jenny Lendle 5:30

I think they're going to hold , they're going to hold , they're going to hold . And that's the good thing about St Charles Parish , I think too , is that we hold our value , even our homes . The homes hold their value , the rental homes hold their value , the rent prices , yeah . So I think you know it's a good time for an investor Like you said , it's a good time for someone who might want to buy a house and has a low interest rate on their current home and wants to keep that property to rent .

Jenny Lendle 5:54

It's a good time for something like that yep so , yeah , I think , rent versus buy . There's a lot of young people out there , I feel like are trying to buy their first home and it's just not the right time and they only are like want to buy , I want to buy , do not want to rent , mm-hmm and of we kind of maybe drilled that into their heads years ago .

Lauren Jones 6:14

Right .

Jenny Lendle 6:14

You want to buy , you want to buy , you want to buy . But today it's not necessarily the best idea for a young person getting into the market right now to always go out and buy that home .

Lauren Jones 6:26

Right .

Jenny Lendle 6:26

And carry that big mortgage when maybe rent for a year yeah , save some money , yeah . Build your big mortgage when maybe rent for a year .

Lauren Jones 6:34

Yeah , save some money , yeah um , build your credit up , yeah , to where ?

Jenny Lendle 6:36

when you are ready to buy you have a better interest rate right and hope that insurance rates drop a little yeah but I mean better , maybe better interest rate , and then get in there and try to buy a house . So yeah , I agree I agree .

Lauren Jones 6:48

It's definitely um a turn for me , because most clients that come to me and ask me , or previously asked me , that question , I would say oh heck , no , don't go rent , you're wasting your money . Wasting your money , yeah , but I don't know . Right now I feel like you're going to waste just as much paying your rent as you are going to be to throw it at an insurance company .

Jenny Lendle 7:11

Yeah , you know what I'm talking about . I'm wasting it one way or the other .

Lauren Jones 7:15

You're paying probably over a thousand dollars a month in escrows . I mean , the chances of you recouping that in a major disaster in in 30 years is extremely slim , right , so do you ? Just , you know it's what and what , and what at this point ?

Jenny Lendle 7:33

Yeah , I think so . I guess some of the down , even though we both think right now , definitely , if you , if you want to buy , renting might be the better option . But what could be the downfall to renting ? Um , and that would be again giving your money away .

Jenny Lendle 7:49

But when we do have natural disasters , we had a lot of people being displaced after Hurricane Ida , and then if the owner decides to sell . So those have been , I guess , the top two things . What are the reasons why you see a lot of your tenants moving around ? I know when they're moving around someone's wanting to sell their house or someone still might have some damages that they're trying to repair and they want the tenants out so those I guess are some of the things to look out for whenever you're renting property , maybe make sure that is the seller looking to sell this is something they want to keep forever as a rental yeah .

Jenny Lendle 8:26

I know the few that I've managed . They're strictly rentals yeah like nobody's looking to sell . So I usually let the tenants know that ahead of time , like hey , you know you're a long-term lease .

Lauren Jones 8:37

They're in this business .

Jenny Lendle 8:38

Yeah , a long-term lease is definitely doable , if that's . What , if you want to settle down for a while ?

Lauren Jones 8:43

Yeah .

Jenny Lendle 8:44

But then you have some tenants who move year after year , after year , yeah , I see that too .

Lauren Jones 8:49

I have two apartment complexes and those seem to be more revolving than any . The turnover in apartment complexes versus a single-family home . Yeah , yeah , it's , year after year . I mean it doesn't stop .

Jenny Lendle 9:05

Oh , wow , yeah , and that's frustrating too , but I guess from it depends . Like you said , the single-family houses , they'll probably stay a little bit longer . The ones I manage . We have long-term tenants in there and that's what we hope to get , but then I've had other ones that they will turn over year over year . People just want to move around , or they're not happy with the area , or they need a bigger house or a smaller house .

Lauren Jones 9:29

The rent was too high , or just their needs change . They had a roommate . Now they have a boyfriend with a kid , or you know what I mean . Like those things , life changes , right life changes definitely um so yeah .

Jenny Lendle 9:41

So I guess today renting is not a bad option right buying is great , and if you can get there and if you're comfortable with all of the numbers , then fine , but don't feel pressured to buy something because you're adamant about not renting right it's not terrible like I would tell my kids today go rent something right see how you feel living on your own , spending that money every month what does that feel like ? Yeah , don't come back home , but can you do it ?

Lauren Jones 10:09

how much more can you afford and right ? There's a lot of things that I think you know first-time homebuyers don't really realize until they're in that position , and had they maybe rented for 12 months , they probably would have said , oh , I'm never doing that shit again .

Jenny Lendle 10:21

Right , you know , or I don't want to do this .

Lauren Jones 10:23

I don't want to be house broke . You know , when you buy a house and you're in a 30-year mortgage and you put 10% down , it's not beneficial for you to sell it in 12 months .

Jenny Lendle 10:34

No , not at all .

Lauren Jones 10:35

I mean you'd throw that money , that down payment , right out the window .

Jenny Lendle 10:38

Not today , that's for sure .

Lauren Jones 10:40

You would never get that back out of that

Test Before Buying or Renting

Lauren Jones 10:42

house .

Jenny Lendle 10:42

No , so it is good to test it out . It is Just like moving in with somebody . It is you test it out , you test it out .

Lauren Jones 10:49

Before I marry you , let me see how you brush your teeth .

Jenny Lendle 10:52

Right , see what your habits are . That's funny , but same thing Test out living alone , test out , paying bills every month . You know these new , these young people coming up , graduating high school , getting into college , graduating college . Yeah , see how it feels for a little while . I mean , obviously , if you definitely want to buy , give us a call .

Lauren Jones 11:12

Right For sure , if you want to rent , give us a call Call .

Jenny Lendle 11:15

Yeah , because we deal with that a lot , but it is not the end-all , be-all , no .

Lauren Jones 11:19

You have options . No , and just like , is it the right time to buy ? It's situational .

Jenny Lendle 11:30

And I think the same little short today , but that's okay . It's okay . Rent versus buy tagging on to is it a good time to buy ? We're always here to answer any questions anybody ever has . If you have questions about our podcast , comment underneath our post . We're on Facebook , between my Facebook page and Lauren's Facebook page , and we're here every Monday at 10 am . So this is the Move Worthy podcast , with myself , Jenny Lindley and Lauren Jones . And together we have the experience to .

Lauren Jones 12:06

Move you forward .