Moving Out? In Today’s Real Estate Market, Which is Better, Renting or Selling?

Watch on your mobile device >>

Contrary to what many experts, news media or analysts may have you believe, market conditions are not as bad as they are portrayed.  In some areas inventory is down, prices are up and the general consensus is a positive one, moving up in a positive outlook for the future.  But the question does arise when one is moving from a home – whether selling it now or renting it to hold out for a better selling price makes more sense.  Here we’ve put together some considerations that will help you discern which is the better choice for you.


Real Estate Is Always a Gamble, Now’s Not Any Different

There is no real way to tell exactly how the market will behave at any given time in the future but currently all trends reasonably point to both options being equally as viable.  If you opt to keep your home and rent it out, say for the next couple years or so, then there is a chance that prices will hit rock bottom and then begin to climb up again during that period.  However, there is also a chance that prices continue to plunge – in which case you would have been better off selling while a bit ahead of the game.

The main thing to keep in mind here is that even though things go up and down in the short term, real estate is a great long term investment and it’s fair to say that ultimately there will be a gain on your property value.  

Buyers’ Market Today, Who Knows What Happens Tomorrow

So many indications of it being a strong buyers’ market these days make it seem that the opportunities on the buying end of things are endless.  However anything can change and it can change fairly quickly.  Take our current interest rates.  Though buyers have been used to seeing such historically low interest rates for some time now, if the government decides to raise the rates it will instantaneously change things.  Since buyer’s ability to purchase will be affected in a major way, prices will concurrently come down.  

Heavy Foreclosure Inventory Appears to Dominate The Coming Path

Nationwide there are literally millions of foreclosure properties out there that need to go through the system.  As foreclosure and short sales flood the market, prices will plummet as a result of these distress sales.  In some markets this trend has crept into the upper-end niche of the real estate industry.

Why Renting Can Be Risky

If a homeowner rents out their property and while it is on rent the condition of the property suffers some damage – then they have negatively impacted the value of the home during a time when they had hoped for an increase in value.  This is the single biggest gamble when it comes to choosing to rent your home rather than selling it.

Also, there is no way to tell what the condition of the selling market may be when it comes time for you to decide to sell. 

Consult With Your Realtor To Assess Your Options

Realtors deal with myriad situations on a regular basis and they also intimately know the statistics of your neighborhood and surrounding areas.  By consulting with a trusted and reputable Realtor in your neighborhood, you can gain ample perspective on exactly how your property might fare in today’s market conditions.  An informed decision would be made, given the factors at hand so you can be assured that your choice is the best as per your own situation. 

"Invest in Homes Today"- Warren Buffet

Watch on your mobile device >>

The news spread like wildfire.  No, it’s not another politician’s sex scandal or the latest (definitely not greatest) gas prices.  It is the monumental statement made by Warren Buffett that he would buy up “a couple hundred thousand” single-family homes.  The catch is that he would do that if it were something he could practically manage. He may not be able to practically manage it but individuals certainly can.

Think about that.  For months, if not more than that, countless Realtors have been urging their clients and potential clients that now is the perfect time to buy.  Now that it comes from one of the biggest investors of our time, it brings new light to the subject for many investors and has generated widespread industry buzz from the moment the billionaire uttered those words.

In an interview where he discussed several topics, soon into the discussion with Becky Quick of CNBC’s Squawk Box, he said that in addition to equities, single-family homes are probably the most attractive investment there is out there right now.  With the low rates that seem to be heading further down still, he suggests buying at these low interest rates and then for homeowners to refinance if and when the rates dip even more. 

He cited that the only reason he has not purchased as many homes as he would have liked is because of the practicality of managing the transactions and properties.  Apartment units might have been more manageable and in his words, he said he would “load up on them” had that been the case. But for the everyday investor it makes perfect sense to seize this opportunity and Warren Buffett highlights this repeatedly in his most recent discussion on CNBC.

Mr. Buffett shared his perspective on the idea of buying homes at distressed prices, fixing them up and renting them out as an ideal way to get a solid return on investment.  Referring to the changing trends and attitudes within the housing market, he also said this is the perfect way to “short the dollar” because with a 30-year fixed rate mortgage it can go two ways; either the interest rate is too high down the line after which you can go and refinance or if it’s too low the other guy’s stuck with it for 30 years.  Could this be the return of the house-flipping craze that we saw boom in the mid 2000s?

Mr. Buffett’s statement brings new light to something that so many agents and mortgage consultants have been saying all along.  Buy now.  At a time when stocks are just now rebounding after four years of inching their way back up, he says that consumers should acquire 30-year fixed rate mortgages and then refinance when rates go down further. 

If homeowners can hold on to their property for a long time after purchasing it at the lowest rates the industry has to offer they are sitting on the best investment possible of our time.  Of course equities are still very strong but they have come up quite a bit and Warren Buffett says owning a home is a “leveraged way of owning a very cheap asset”, making it quite possibly the most attractive investment that you can make.