Recently I have had the opportunity to be involved in a transaction where a tenant had been living in a home for 16 plus years. That person felt like the home was their own. They raised kids there, entertained there, and lived a good portion of their lives in that house. They did not however own the property. The owner had been renting this property to them at a rate which was far below the market value and they had become accustom to this rent rate. Unfortunately, for this tenant life came to a huge reality check one day. The owner was getting up in years and decided it was in his best interest to sell. He gave them more than the required time to move by law to help them locate a new home and yet when the tenant started looking for a new rental they quickly became aware that the rent they had been paying was half or less of what something else would cost them to rent.
The market value of the house these tenants were living in had appreciated out of their price range and the tenant who had not been saving or preparing for the day they may have to move did not have the means to purchase the house.
We look at home ownership as a way to build wealth. People always assume property will appreciate and for the most part it does. They want something to leave to the kids, a legacy—the family home. Perhaps they are looking for a way to shelter income and save money on their taxes. The new tax law may make it so fewer people can deduct the mortgage interest from their taxes. The freedom of renting does allow you the opportunity to move if you don’t like the area or the neighbor.
I think people think less about stability. The fact is that if this tenant had purchased the home on a fix rate mortgage 16 plus years ago, the house payment today may not have been much more than what they are currently paying and they would not have to move because someone else was making the decision to sell and now the current value of the home precludes them from buying it. They would be in control of this decision. I personally think the power to choose whether I sell and move or not, is priceless.
The value of being a homeowner is sometimes measured in things far beyond what is first presented.
If you are thinking about buying or selling, please feel free to contact me at 405-213-2992 or visit my website: www.equityhomesteam.com.