A recent article posted at NBCNews.com Business uses Zillow’s Break Even Horizon to determine the top 10 cities where renting is more economically sound than buying and how long it takes on average to break even if purchasing a home. This figure is calculated based on the net cost of purchasing a home vs. renting the same house. Here are the top 10 cities renting costs less than buying:
New York City, NY. Zillow Break Even Horizon: 5 Years; Zillow Rental Index: $2,016; Annual Change in Zillow Rent Index: 19.4%
Renting an apartment in the city would save more money than purchasing a home unless you were going to be living in NYC for more than 5 years. The average home price is $462,500. A 20% down payment is going to be $93,000 for a home this much and with the current rate of 3.277% and a 30 year fixed mortgage, you are looking at a monthly mortgage payment of $2,145 which is higher than the current rental index.
Seattle, WA. Zillow Break Even Horizon: 4.3 Years; Zillow Rental Index: $1,850; Annual Change in Zillow Rent Index: 4.7%
Waterfront property in Seattle averages about $392,200 as of December 2012.
Boston, MA. Zillow Break Even Horizon: 3.9 Years; Zillow Rental Index: $2,299; Annual Change in Zillow Rent Index: 11.3%
Based on 25 new single family homes for sale in Boston, MA, the average home costs $727,200. A 20% down payment is $145,000 with a 3.277% interest rate, your monthly mortgage payment would be $3,334. Renting in Boston on average would be a monthly savings of $1,035.
Washington, D.C. and San Francisco, CA tied for 4th for the amount of years it would take to break even if purchasing a home.
Washington, D.C. Zillow Break Even Horizon: 3.7 Years; Zillow Rental Index: $2,439; Annual Change in Zillow Rent Index: 7%
There has been an increase in new home development in the D.C. area. As of December last year, the average home cost $402,400 which is up by 10%.
San Francisco, CA. Zillow Break Even Horizon: 3.9 Years; Zillow Rental Index: $3,281; Annual Change in Zillow Rent Index: 12%
San Fran has seen an 18% increase in home sale prices year after year! Currently, the average home costs $770,600. A 20% down payment of $154,000 with the current interest rate of 3.277% would be a $3,529 monthly payment. By renting, you would save on average of $248 a month.
Portland, OR. Zillow Break Even Horizon: 3.6 Years; Zillow Rental Index: $1,423; Annual Change in Zillow Rent Index:
Portland has the most bike commuters in the U.S. Last year, 21.49% of homes sold were sold at a loss, but the average value of homes has risen 8.8% ($257,400).
San Diego, CA. Zillow Break Even Horizon: 3.4 Years; Zillow Rental Index: $2,116; Annual Change in Zillow Rent Index: 2.9%
The average San Diego home value is up 11% making the average home $404,100.
Los Angeles, CA and San Jose, CA tied for 7th place based upon the number of years it would take to break even after purchasing a home in either location.
Los Angeles, CA. Zillow Break Even Horizon: 3.3 Years; Zillow Rental Index: $2,311; Annual Change in Zillow Rent Index: 2.3%
Los Angeles has a very high unemployment rate and the home rates dropped about 35% which actually makes L.A. more affordable for home owners. The average home costs $399,800 which was up by 9.7% as of December 2012. If you put down a 20% payment of $80,000 with the 3.277 interest rate with a fixed 30 year mortgage, your monthly payment is going to be $1,863.
San Jose, CA. Zillow Break Even Horizon: 3.3 Years; Zillow Rental Index: $2,513; Annual Change in Zillow Rent Index: 4.5%
San Jose, CA has a lot more people interested in purchasing homes since the average annual income is $92,500. San Jose has a very high employment rate with over 6,000 technology companies. The average home in San Jose is $544,600 so if you put down 20% ($109,000) + 3.277% + 30 years = $2,514 monthly mortgage payment which is $1 higher per month than the current rental index!
Denver, CO. Zillow Break Even Horizon: 2.8 Years; Zillow Rental Index: $1,468; Annual Change in Zillow Rent Index: 9.3%
As of December 2012, Denver’s average home value was up by 14.1% with the average home costing $233,700.
Austin, TX. Zillow Break Even Horizon: 2.7 Years; Zillow Rental Index: $1,516; Annual Change in Zillow Rent Index: 6.2%
At the end of last year, Austin had an overall home value increase of 4.7% = $209,900.
Nashville, TN. Zillow Break Even Horizon: 2.6 Years; Zillow Rental Index: $1,190; Annual Change in Zillow Rent Index: 3.8%
The average home cost is now $140,000, which is up by 6%.
Most of the cities listed above experienced an overall increase last year in their median home values which is great news overall for the market!
Renting is much more prevalent these days than purchasing a home. Many times, people who are relocated prefer to stay in a rental before deciding to purchase a more permanent living solution. Renting is also great for individuals who want to explore a new city but don’t want to stay there permanently.
Many apartment communities do typically require a year lease to be signed and there are 5 factors that need to be taken into consideration before you sign on the dotted line:
- Laundry. Typically, apartment complexes do not include a washer and dryer in the units themselves but have a common laundry area. Sometimes, washer and dryer hook-ups are available in the units and it might be wise to consider purchasing a washer and dryer or you can rent these. Azuma Leasing rents washers and dryers for a small monthly fee. They are located in most of the states, excluding New England and many of the northern states. If you are okay with sharing a common laundry area, be sure to take note of where the facilities are located in relation to your unit; if weather will be a factor or if you have to climb stairs with your heavy laundry.
- Refrigerators. Sometimes, this is an appliance that is not included in your rental. Azuma Leasing also rents refrigerators or you can consider purchasing one.
- Proximity. Be sure you find out how close you are going to be to your neighbors and what types of sound proofing (if any) the complex has utilized for noise cancellation. Opting for a top floor unit will eliminate noise from overhead but not necessarily next door.
- Storage. Most apartments do not typically offer ample closet space. Sometimes, a unit will come with a storage unit on the balcony. If the unit you want doesn’t have enough room to store your belongings, there are alternatives. Certain furniture items come with built-in storage. There are other organizational tricks online that will help you maximize your space without cramped living.
- Decor. You found the perfect rental within your price range and area but don’t like the outdated feel of the interior of the apartment. Ask your landlord if you could do some small repairs, painting, and updating for a discount in your rent. Be sure that it is agreed upon in writing and be sure you know of any limitations so you don’t get charged for these updates later on.
Most of these items are not necessarily deal breakers but they are important factors to consider before you get into a year-long lease.
What is Corporate Housing and what questions should I ask when choosing a property and a provider? CHPA, The Corporate Housing Providers Association has a best practices guidelines and Certifies individuals as CCHP, Certified Corporate Housing Professionals. Northeast Suites takes their commitment to excellence to another level to ensure your stay is as peaceful and seamless as possible.
Before you depart the unit, you should fill out the departure side of the “unit condition form” or if one wasn’t provided, add to the list you created at the beginning of your stay. To be the most thorough, you should schedule a walk-through with your landlord and/or leasing agent to review the “unit condition report” with you and have them and you sign off on the written form/list and date it. This way, when it comes to getting your security deposit back, you will already be prepared about what to expect.
- Research the amount of days your landlord/community has to refund your full or remaining security deposit. This varies by state. In CA for example, the landlord only has a 21 day window to get these refunded. Most other states are 30 days unless otherwise specified.
- If any damages were deducted from the security deposit, the landlord/community/leasing agent must send over a detailed statement showing what was deducted from the security deposit. If you have all of your ducks in a row including before and after photos with a time date stamp and your copy of the unit’s condition upon arrival and departure, you should be able to fight any damages that have been taken out if you didn’t do them.
- The landlord/agents are entitled to do their own inspection report once you have moved out of the unit. During this inspection, damages that might not have been identified on the unit condition form may be found once the unit is free of the tenant’s possessions. If applicable, these items will be deducted from the security deposit.
- If a cleaning fee wasn’t charged up front, then cleaning charges may be deducted from the security deposit. If there are any damages to the carpets, the tenant can be charged for the useful life of the carpet or the remaining life. For example, the carpet is 8 years old but it was expected to last for 10 years. The initial cost of the carpet was $1,000. The tenant cannot be charged the full amount but they can be charged for $200 which would add up to be the remaining 2 years left on the carpet.
Taking photos and recording details of any damages in the unit no matter how small prior to moving in and out can be huge when it comes down to getting your full security deposit back once you move out.
Be sure you submit any correspondence between you and the landlord/leasing agent in writing. As always, before signing any contract, be sure to do all your research ahead of time so you know what you are getting yourself into.
We hope this series of posts was helpful for all current and future renters.
Last week, we covered rental agreements and security deposits. This week, we will be discussing a unit maintenance that may arise while you are leasing a property. As a renter, you must take responsibility for any unit damages that were the fault of yourself, anyone staying in the property, your guests, family members, and/or pets. If you company is the lease holder, you will still be fiscally responsible for any damages you may cause during your stay.
- The lease agreement that you or your company signs will outline in detail what the landlord’s responsibility would be in terms of any maintenance issues. If any damage can be deemed a defect in the unit not caused by tenant negligence or fault, then the landlord would be required to fix these issues. Some of the items that might be the landlord’s responsibility might include: Faulty wiring; Structural damage; leaking plumbing; mold; rust, etc.
- If ever there are any issues that the tenant feels are the landlord’s responsibility, the landlord needs to be notified immediately.
- The landlord also needs to be notified ASAP if there are any major maintenance issues such as a burst pipe; broken furnace/heater; backed up sewage, etc.
- It is best to submit any requests to the landlord by phone and in writing.
Again, be sure you know the real-estate laws regarding any maintenance issues in the state you are residing in and be sure that you go over this section in the lease in detail with your landlord.
Stick around for our final post next week regarding a renter’s rights and responsibilities regarding the departure process.
Last week, we covered doing a detailed inspection before you sign any agreement. This week, we will be covering some of the different aspects of real-estate laws in regards to rental agreements and security deposits. Each state’s laws vary regarding leasing agreements and security deposits. Be sure to do research prior to signing anything on the specific state’s real-estate laws. Below are some helpful hints and tips to make you an informed renter:
- Know what type of agreement you are signing beforehand. Is it set for a fixed departure date? Are you able to extend your departure date if you haven’t submitted notice?
- Find out what other fees are associated to the rental. Is there a non-refundable cleaning fee? If you have a pet, are you going to be charged an additional pet fee? Do you have to pay for a rental credit check?
- Ask when rent is due and find out if you have a grace period before any late fees are assessed.
- If a security deposit is required (which most of time it is) find out if it is refundable after you depart. If so, how many days do they have to refund this back to you? This varies by state. In most states, security deposits cannot be non-refundable, but other non-refundable fees can be charged as long as they are separate from the security deposit.
- Be aware that furnished rentals are generally a higher price for rent, deposits, and fees.
Doing your own research beforehand will make you the most informed renter. Some state laws are geared to be more in the tenant’s favor, like California, while others like Colorado lean towards the property owner’s favor.
Join us next week when we discuss maintenance issues.
Finding the perfect housing solution to meet your needs can be a hectic, time consuming process. Save yourself some headaches by knowing up front what type of housing you require; the neighborhoods you would be comfortable living in; and if possible, walk all possible rentals prior to signing anything.
In this four week series, we will be covering the various aspects of smart renting and the steps that should be followed before signing a legally binding agreement. Below are some helpful hints and tips regarding a unit’s condition prior to arrival:
- Always inspect the interior of a rental with the landlord or leasing agent prior to signing a lease.
- Take photos of any and all damages and also complete a “condition upon arrival” form within 24 hours of moving in.
- If this form is not provided, make sure to document all damages in writing too.
- These items should include:
- Mold and odors;
- Rusty water;
- Faulty electrical wiring/outlets/light switches;
- Inadequate heating/A/C;
- Damaged furnishings (if applicable) and appliances;
- Damage to the floors/carpets/baseboards;
- Any signs you may see that there are insects or rodents living in the premises.
Have the landlord and/or leasing agent sign a copy of either the form they provided or the written report about all damages that you created. Keep a copy of this form in a safe place for your records and so you can refer to this when you fill out the same information when you move out.
- Check out the exterior of the building(s), common areas including courtyards, hallways, parking, and dumpsters and determine if these areas are in good condition and are well maintained.
As always, if you get an uneasy feeling about a particular complex or unit, do not sign any agreement until you are 100% satisfied with your new home.
Stay tuned for more on your rights and responsibilities as a renter next week.
Many believe that travel insurance is unnecessary and costs too much to be used regularly. The following tips and facts about travel insurance from InsuranceHotline.com might make you reconsider purchasing travel insurance for your business trips and/or vacations this summer.
- Myth – travel insurance is only needed while traveling outside of the country. Traveling within your country does provide less of a risk of financial trouble but risk is still present. If you have to cancel your trip or have a medical emergency while traveling, your travel insurance policy can cover you for these costs incurred.
- Myth – airlines cover costs for cancelled flights. Whenever a flight is cancelled because of weather or other natural causes, the airlines do not help pay for your hotel stay, food, or re-booked flights the majority of the time and these costs would all be up to you, the traveler. If you purchased travel insurance; however, you would be one happy camper as it will cover these costs for you.
- Myth – short trips don’t need travel insurance. It is common thought that risks are decreased depending on the length of time and this frankly isn’t true. Accidents happen all the time and no one sees them coming so be prepared even when only traveling for short periods of time.
- Myth – if an emergency comes up bookings will be refunded. Airlines, hotels, and attractions have specific cancellation policies and unfortunately are not that understanding. The majority of pre-paid tickets are non-refundable and many hotels still require payment for at least one night. Travel insurance would get your money back from all of your pre-booked accommodations, flights, attractions, etc.
- Myth – insurance is too expensive, especially with multiple people and vacations. Travel Insurance is actually pretty affordable these days. Some companies even offer policies that are good for an entire year and multiple trips and family policies which covers everyone listed on the plan.
To review different insurance companies offering travel insurance, visit InsuranceHotline.com which acts as a free online insurance rate comparison service with more than 30 insurance companies. All quotes are based off of the lowest rates available on the network. This site is designed to give consumers a truly unbiased quote.
When it comes to unit damages, it can sometimes come down to the company’s word against yours, so protect yourself from unnecessary charges at check-out by referencing these three tips:
- Conduct Thorough Check List Review: The corporate housing provider should give you a unit condition sheet (i.e. an inventory check list specific to the property upon your arrival). Be sure to fill this out in detail after you first move in, make a copy for yourself, and re-submit the form back to the company within 24 hours.
- Take Photos: If there are damages to the unit when you first move in (such as scratches in appliances, torn furniture, stains on the carpet/upholstery, etc.) be sure to take photos. Better yet, take a recording on your phone of the entire unit from top to bottom while completing the initial walk through upon move in. This way, if the company charges you for any damages that were there before, you will have your own proof to prove otherwise.
- Create Your Own List: Compile your own checklist of the unit’s inventory within 24 hours of checking in and before departing the unit in detail in case any missing items are charged to you. Also, property management corporate housing companies will have the specific inventory for all of their properties in their office. Be sure to ask them for a copy so you can compare it with yours. Send in your arrival and departure inventory lists with the unit condition sheet to the company as soon as possible.
Remember everything needs to be in writing and in photo/video to ensure you will not be charged for damages. The more thorough you are, the better covered you will be in making a case.
Protect Yourself from Rental Fraud: Three Steps to Take Before Reserving Your Next Corporate Housing Property
Technology creates ease of use when it comes to reserving a corporate rental; however, it also increases the potential for fraud. Before signing any rental or leasing documents, be sure to take these three important steps first:
- Run a Google Search on the Company. Look at any reviews about the company, review the website(s) to ensure a professional vibe, engage on their social media networking sites, and read any articles published about the company before finalizing anything.
- NEVER WIRE MONEY!!!! Alarm bells should be ringing in your head if a company or private person is asking you to wire funds. This is a tell-tale sign that the rental being offered is fraudulent. Legitimate rental owners will either ask for a credit card or check/money order/cashier’s check to reserve the unit.
- Use Your Gut. If the rental rate seems too good to be true, it most likely is. Research extended stay hotels or other corporate housing companies’ daily rates in the city or area you are looking to rent before you get talked into signing a long- or short-term lease. Also, ask to walk the unit before committing. If you will be renting a unit without being able to view the property first, then be sure to ask for current pictures of the unit with a date and time stamp.
If everything checks out, be sure to have the leasing agent or property owner go over the lease documents in detail with you before signing them. When in doubt, always ask questions first before making a commitment that you may not be able to break.