If you are renting an apartment or home right now, you may be wondering whether you should buy or continue renting. Most renters eventually consider buying a property, especially when rents increase. Buying a foreclosure is especially attractive for renters, as many foreclosure properties are priced below market value and therefore are generally quite affordable.
If you are considering buying a foreclosure property, one thing you will want to consider is the total monthly cost of your housing. If you are renting, you are paying rent, utilities, parking, and possibly tenant’s insurance. If you decide to buy a foreclosure property, you will likely pay a mortgage, taxes, insurance, and maintenance costs. Do the math on paper. You may find that many foreclosure homes on the market cost the same or less than your current apartment. Compare several properties on foreclosure listings and consider how much such properties will cost per month to own. Use online calculators to evaluate total costs of mortgages and other costs. You will soon find that it is possible to find a foreclosure home that may cost less in total than your current apartment.
The next thing you will want to consider when you are thinking about buying a foreclosure is your long-term financial goals. If you are renting now, you might want to consider where you want to be financially in five, ten, and twenty years. How much money do you want to have in equities, in assets, and in investments? How much money do you wish to make per year? Keep in mind that foreclosure properties can be an important building block for your financial future. Real estate is an asset that builds your net worth and your equity. Since foreclosures are priced below market value, they help you enjoy instant equity. This, in turn, can help you strengthen your credit rating and therefore help you build a brighter financial future. If you want to continue to rent, you will need to put aside a great deal of money each month in order to enjoy the same equity and net worth that a foreclosure would offer you.
If you are considering buying a foreclosure, you may also want to consider how long you plan to remain in your current location. If you plan on staying for at least two or more years, do the math and determine how much money you would spend on an apartment and how much you would spend on a foreclosure. You might find that a foreclosure home makes more financial sense if you plan on remaining in your current location for two years or more. Keep in mind, too, that when you do move, you can resell your foreclosure property and even make a profit. If you rent, your rent money goes to enrich your landlord, not you. You will not recoup that money when you move. This is another excellent reason to consider foreclosures.