Auston Woods Apartment Homes Blog

In the American mind, renting has long symbolized striving rather than achieving. But as we climb our way out of the Great Recession, it seems something has changed. Americans are getting over the idea of owning the American dream; increasingly, they're OK with renting it.
 
Home ownership is on the decline, and renting is on the rise. But the trend isn't limited to the housing market. Across the board, Americans are increasingly acclimating to the idea of giving up the stability of being an owner for the flexibility of being a renter. This may sound like a decline in living standards. But the new realities of our increasingly mobile economy make it more likely that this transition from an Ownership Society to a Rentership Society.

The unsentimental fact about the American dream is that Americans never really owned it in the first place. For the past three decades, especially, consumers haven't so much bought their quality of life as they've borrowed it from banks and credit card companies.

Now consumers are following the example of corporations, becoming more efficient. And it starts at home.

Housing is the biggest single component of consumption in the U.S. economy and the source of much of our present misery. The typical consumer spends about 32% of his or her budget on shelter. In the last decade, that generally meant borrowing a lot of money to take "ownership" of a home.

During the boom, the home ownership rate grew steadily, peaking at a record 69% in 2006.

Ownership-boosters failed to note that homes purchased in 2005 and 2006 with no-money-down, interest-only mortgages weren't really bought. They were simply rented until the "owner" flipped them or walked away from the mortgage.

In the post-bust climate, renting has emerged as a much more economically efficient way to pay for housing. A one-year lease represents a far less onerous financial obligation than a 30-year mortgage. It's difficult to get into too much financial trouble as a renter. The homeownership rate has fallen from its peak in 2006 to 65.4% today.

For an increasing number of Americans it makes more sense to rent. According to Moody's, by late 2011 it was cheaper to rent than to own in 72% of American metropolitan areas, (such as Charlotte) up from 54% a decade ago. And the more people who do it, the more socially acceptable and desirable it becomes. The decline in the ownership rate means that about three million more households rent today than did at the height of the bubble.

It's tempting to view the rise of renting as an economic step backward. But many would argue the rise of renting is a sign of a system adapting to new realities.

The U.S. economy needs the dynamism that renting enables as much as, or more than, it needs the stability that ownership engenders.

And the rising popularity of renting is hardly contained to the housing market.
 
Finally, perhaps, Americans are absorbing a piece of wisdom from Thoreau: "And when the farmer has got his house, he may not be the richer but the poorer for it, and it be the house that has got him."

For information on renting an apartment in Charlotte, NC, contact Auston Woods.

Wall Street Journal

More couples are saving cash by opting to rent rather than buy. That dream of walking down the aisle and buying the perfect home is becoming a thing of the past. According to Zillow.com, apartment vacancy rates have fallen from 8% in 2009 to just 5.6% at the end of 2011.

Jay and Jessica Masanotti have been married for 5 years. During their first year of marriage they bought a house South Carolina in hopes of following the traditional American Dream, “You get married, buy a house, have kids, that’s the American dream; buying a house was the next step."
 
They figured the home would be a good investment, but now admit that they didn’t know what they were getting into.
 
But a new job in the Charlotte area put that newlywed home in an unsettling market. No matter what happens going forward, they will lose money on the house, "We bought it in 2 days and in 6 months, and we got nothing. It’s a great house but we will have to take a hit just to sell it and just to get it out from under us so we don't have that financial burden any longer."
 
If young couples are thinking about buying a house that they need to be prepared to make a long-term commitment. If buyers cannot commit to settling down in the area they are looking to buy, you’re better off renting. Renting offers flexibility and freedom to walk away and you can call someone else if something breaks or goes wrong.
 
Charlotte is seeing a big uptick in people renting. Rentals is this economic climate offer some big opportunity. Renting an apartment in Charlotte, NC  is a way to have what you want right now without having to wait until you can afford it.

For Jessica and Jay, renting in Charlotte has done just that, “It afforded us an opportunity to live in an area where we could never afford to purchase a house."
 
For more information on renting an apartment in Charlotte, NC,  contact Abberly Green.

Original article – Fox Charlotte

The housing market is stagnating right now and real estate brokers would have potential buyers believe that there is no better time than the present to buy a home. It is true, prices are down and mortgage rates are at all-time lows.

Unfortunately for the real estate brokers, many clients are not persuaded by that logic. Instead, in increasing numbers, they are choosing to rent instead of buy — unconvinced that the housing market has yet hit bottom. Would be buyers also understand that unless you plan to stay in your home for more than 10 years, buying a home may not be the right investment for everyone.

With apartments in Charlotte, NC, located near downtown, the airport and UNC, offering apartment amenities that can’t be found in homes, renting is a great option for many. There is also a broad mix of tenants at Auston Woods Apartment homes: young single residents and families and empty-nesters that no longer have homeownership on their wish list.

For information on beautiful one-, two-, and three bedroom apartments in Charlotte, NC contact  Auston Woods.

One of the most popular home ownership myths in Charlotte, NC is that owning a house is a huge tax break as compared to renting.  I don’t know how many times people have personally told me that they want to buy a home because they NEED a tax deduction!  I just shake my head in disbelief because I have done the math.  

If your mortgage interest and other qualifying expenses such as charity contributions aren’t more than the standard deduction, ($11,600 for joint filers in 2011), there is no tax advantage to owning a home as opposed to renting an apartment in Charlotte, NC.  Assume that you buy a $200,000 house with a 5% downpayment at a 6% interest rate.  Your mortgage interest for the year would be $11,336.  The Standard Deduction for joint filers is $11,600.  

In this example, there is NO TAX BENEFIT.  Even when there is a tax benefit, you most likely paid much more money to maintain the house than you are saving in taxes.  If your mortgage interest is more than the standard deduction and you choose to itemize, there is little to no advantage.  

For example, assume that your mortgage interest in 2011 is $15,000.  You would get to deduct an additional $3400 if you itemize BUT you spent $15,000 in mortgage interest to save $850 on your taxes (assuming 25% tax bracket).    

Don’t forget that you would also have all of the other expenses of home ownership that you would not have incurred when renting an apartment in Charlotte, NC in an HHHunt community.

The question has arisen more and more. Should I rent or buy? The answer is personal to your situation. While mortgage rates and housing prices are low, there is still a lot to be said for renting an apartment in Charlotte, NC.

Based on your financial situation, your job situation and frankly, how much time you want to spend on home repairs, the answer could be very different for every individual or family.

There is much to be said about renting. Sudden roof leaks or broken appliances can make your wallet take a hit. Unforeseen home expenses cannot really be incorporated into a budget.

If there is any possibility that you will not stay in the Charlotte area or that your job will relocate you, renting may be a better option. Closing costs and fees can really add up, not to mention the first several years of mortgage payments go to the interest alone not the principal.

But there is an even more practical reason for renting. Maybe you just don’t have any interest in home repairs and cutting the lawn. Apartments are the solution to maintenance free living without the condo fees. With so much to do in Charlotte, NC your time off should be your time off to spend however you like.
 
Talk to a financial advisor and review your expenses first when considering renting, but here is an easy calculator from HGTV to help you determine what you can afford.
 
Contact Auston Woods Apartment Homes if you want more information on renting in Charlotte, NC.

When deciding whether to rent or buy, you are making the choice to rent an apartment home or renting the capital needed to buy a home. Most Americans don't consider that they are renting equity (from the bank) to buy a home. As you are aware, very little equity is built in the first few years of paying a mortgage. Many people are surprisingly still very unaware of this fact.

This following article explains how renting is financially better than buying in about 75% of cases!

For the Past 30 Years, Renting Was Generally Better Than Buying

If homeownership is the American dream, then the nation had better wake up. That's the message from a new research paper that examines whether buying or renting a home was a better financial decision over the past 30 years. Most would find the result surprising: over the period Americans were better off renting between 65% and 75% of the time, depending on the investment alternative.

The article essentially looks at eight-year periods and assumes that a person invests the money he or she saves by renting. Since buying is generally more expensive than renting, renters have extra money to invest. It also makes a number of assumptions favorable to homeownership, including gains from the mortgage interest tax deduction, the option to refinance, and the ability to walk away -- loss-free -- from an underwater mortgage. Still, renting wins approximately three-quarters of the time.

The staff at economic research organization e21 explains why this result actually shouldn't be so shocking:

Counter-intuitive as the finding may be to some, it is actually quite logical. Unless someone possesses the cash necessary to buy a residence, he or she will be renting one way or another. The choice is between renting the property directly or instead renting the capital necessary to buy the property. The amount of capital to be rented is a function of house prices, while the bulk of a mortgage payment is interest, which is the rental payment on this capital. After 2 years, the typical 30-year amortizing mortgage balance has been reduced by less than 3%. This means that a household that took out a $300,000 mortgage with a 5% interest rate to buy a home has only reduced its mortgage balance by $8,600 after two years despite spending nearly $39,000 in total over this period.

Housing advocates may respond by pointing out that at least the $8,600 in this scenario went towards home equity rather than simply being squandered on rent. But, as demonstrated in the Real Estate Economics article, the principal component of each mortgage payment - i.e. the portion of the mortgage payment that goes towards reducing the principal mortgage balance instead of interest - is an added expense renters don't have.

This turns the real estate industry's biggest talking point on its head: you aren't throwing rent into the wind each month, you're casting away equity.

Of course, that equity also provides a potential benefit. The analysis's eight-year rolling methodology appears to miss the biggest reward of owning a home: living rent-free once the home is paid off. After that 30-years is up, the longer a family remains in that home rent-free, the more buying pays off. Taking this into account would almost certainly change the result in some, if not all situations. Renting may be a better option initially, but there's no eventual reward.

An important point still needs to be made here: buying a home that you don't plan to live in for an extended period of time probably isn't a great idea. The rent you pay in the form of interest on a 30-year loan for five or even 10 years won't be any better than if you had just rented outright. But if you're planning on living in a home for 30-plus years, then you could potentially get some benefit from buying rather than renting.

Original article by By Daniel Indiviglio, The Atlantic