Rent or BuyTo Buy or Not to Buy

The Experienced Realtors

Bill Stewart Lauren Stewart www.KevinPaffrath

.com

There is an old saying that the three most important things to consider when buying

real estate are:“location, location, location.”However, while location is very

important, the most important factor when buying real estate is . . .

Timing

Timing Matters Most

Without considering timing, a buyer risks purchasing a property at peak prices and losing

money when the real estate cycle progresses and the market falls.

For instance, buyers in 2006 purchased at market highs. The majority of these buyers lost money.

By understanding the Real Estate Cycle, the probability of buying at the right time and

making money increases.

The Real Estate Cycle depicts the best time to purchase or sell a property.

What is the Real Estate Cycle?

The cycle is a graphical representation that evidences what is occurring in the real estate market at a particular time.

Historically, the cycle repeats itself. By knowing where in the real estate cycle the current market is, a consumer of real estate may make educated decisions as to when to buy and when to sell.

As the cycle progresses from a low point to a higher point, prices will likely increase.

As the cycle progresses from a high point to a lower point, prices will likely fall.

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The ups and downs of the real estate cycle can be emotional. However, long term investors and home owners accept natural fluctuations in market prices

and notice an overall upward trend in prices.

Long term investors in real estate tend to make money.

In other words, even when prices fall, they typically fall to a point higher than the previous cycle’s low point.

Entry Level Condo (Ventura, CA)

Buy Low, Sell High

Indicator of the Right Time to Buy

The real estate cycle supports evidence of when a buying window exists.

Evidence of a buying window exists when an investor can borrow:

Purchase Price Closing CostsFix Up

And ThenRent the unit for an amount that covers the cost of

money borrowed.When this is true, the buying window is considered to be open.

The Buying Window

Another Indicator of the Right Time to Buy

Evidence of a buying window exists when a home buyer can purchase a home and the monthly payment

is the same or less than the rent for a similar unit (contact agent for estimate).

Rent or Buy?

Rent Effective Mortgage

Essentially paying the owner’s mortgage.

This is lost money.

Principal Pay DownThis is your investmentAppreciationGained valueCredit BuildupPride of OwnershipTax ShelterLower effective paymentCapital Gains

ExclusionsMore profitEquityMore loan opportunitiesNo Rent IncreasesNo Notices to MoveYou’re Own Choices

Would you rather rent or buy?

“Don’t wait to buy real estate, buy real estate and wait.”

BuyThe Experienced

Realtors Bill Stewart Lauren Stewart www.KevinPaffrath

.com

Rent