Hey, today, if you’re in the rental market and looking for rentals and getting a little frustrated and wondering ” Should I rent or buy right now?”, stay tuned because I’m going to have an open conversation with Jane Townsend, my daughter, about that.
So, the other night I was hanging out with my daughter, Jane, and she mentioned that, well, tell me what you asked me, Jane.
Yes. I just graduated college, I have student debt, and I want to move out, but rent is ridiculous and I don’t know what to do.
Yeah. Join the club. I know it’s frustrating. And I have this conversation a lot with folks that are frustrated, you know, just to give you an idea, here in Cherokee County, North Atlanta Georgia Housing Market, you get a three-bedroom, two-and-a-half bath house, 1800 square foot. You’re paying up to $2,000 a month in rent. And that’s not an apartment, that’s a house. A nice apartment complex right now, two bedrooms, two baths, I think they’re going for like $1,400 a month around that price.
So, yeah, I understand the pain and the agony. I’ve talked to a lot of people that are like, we’re thinking about actually buying a house and renting it to our kids, right? So there are some other things you got to be careful with that. I don’t recommend that. If the kids can’t afford it, then you don’t want to get financially wrapped into that. But so then that’s a whole other conversation. So, some of that conversation gets frustrating, right? So, yeah, this, so this is the conversation that Jane and I kind of got into the other day. And I’ve been having a lot with other people that are in the Georgia Housing Market and wanting to rent. You need to understand, you know, it’s all about supply and demand, right? Right now there is very high demand, not the highest we’ve ever seen, but very high demand. And the supply is at all-time lows, not necessarily in rental, but also in housing. And that is a direct reflection of supply and demand. There’s a lot of factors that go into what is causing this imbalance of supply and demand.
So one of the things is that we have in the last few years, we’ve had this huge shortage of housing in our area and really across the nation, but in our area. And that is a direct reflection or result of the Great Recession that we went through. You know, new construction is like, woo! Way behind the eight balls. And so we have this huge lack of new housing in the market. Believe it or not, with all the construction that we see going on, we still see that lack.
You’ve got historically low interest rates, which is only going to increase people’s buying power, which increases pricing. You got construction costs lately that have been going through the roof. That’s pretty much been because of the pandemic. And a lot of manufacturing of products has actually been shut down. So that’s their own little supply and demand thing that’s going on, right? So construction costs are going way up.
Then you’ve got an area here in Cherokee County and the North Atlanta Georgia Housing Market where we are just booming, it’s growing. So you’ve got all those factors that are piling in and making it extremely competitive and depleting our rental property. So it has nothing to do with a bunch of companies out there and people out there taking advantage of it. It is all about supply and demand.
The market dictates pricing. Companies don’t. I don’t. Agents don’t. Appraisers don’t. Bankers don’t.
The market dictates pricing. And it’s all based on the law of supply and demand. The other thing is, that we see is, people are reluctant to put their houses on the market. For another variety of reasons. I talked about that in one of my other videos. So watch that one of why people aren’t selling right now. So that would be kind of insightful, but that’s another major factor in that. So, it’s tough if you’re a renter.
So what do you suggest people in their 20s, who have graduated from college, have student debt, what do we do?
Keep working hard. Take advantage of living at home and just stockpile your money.
So I’ll I share what we’re plan is with Jane. Now I’m in the business.
So my plan is I want Jane to save as much money as she possibly can, which she is doing, but you’re buying a house. You know, we’re going to get her into a house as soon as we possibly can. Open up your mind to the fact that you can buy. Don’t worry about this, you know, everybody’s worried about a bubble and a crash, so on and so forth. Buy a house, you know, get into a house. Open your mind to the fact that you may have to get a roommate in order to afford the mortgage payment, but that’s kind of what the plan is for us anyway. So open your mind to that. It is obtainable, but you’re going to have to have a little discipline here to save up some cash in order to be able to do that.
How much money should we save up?
That is a great question for you, your agent, and a lender to have. Okay.
It is not a blanket answer, okay? However, just understand the old rule, and I still hear this all the time, you have to have 20% down. That’s not true. You can get into a house for as little as 3% percent down. Now there’s a lot of factors involved with that, okay? And some risks involved with that. However, it can be done. So don’t think that you need to have 20% down in order to get into a house. All right?
Okay. So I have a ton of student debt. Am I still going to be able to get a loan?
Great question. That’s also a conversation that you’re going to have with your lender. So there are restrictions and rules that the government has implied. So, when a lender looks at your credit and the debts that you have, that’s going to be one of the factors they look at. But they cap it at a certain dollar amount, so they don’t look at it as a whole. It’s an incentive from the government because they know so many people have student loan debt. I can’t remember what that number is. It changes periodically. It’s not something that I look at on a daily basis, but if you get with a lender, they’ll be able to tell you. You don’t have to consider your student loan debt or they may be able, they only have to consider so much of it. All right. And that would go against your, you know, your income. So anyway, that’s a conversation for your lender and your agent, right? We all get together and have those conversations. So what else do you got?
That’s all I got.
All right. That’s it. Hopefully, that helped explain to you the rental market and answered your question of ” Should I rent or Buy Right Now?” Look at buying a house. The Georgia Housing Market can be crazy but it might be worth it in the long run. I mean, if you’re really that disappointed, I know it may be short-term, you don’t want to put your roots down or anything like that, but I’m telling you, it’s going to be your best bet in my opinion anyway. So, hopefully, that was helpful. And we’ll talk to everybody soon. Thanks.
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