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Buying a Home May NOT be a Good Investment

Joseph Coupal - Thursday, June 22, 2017

Abberly Square, Waldorf, MDSome Americans believe that buying their own house is the best and smartest investment they'll ever make.

There are several valid reasons for buying a home. But buying as an investment or as the cornerstone of your long-range financial plan should not be one of your primary motivators. If your home doubles in value over the next few years, then great! Consider it a bonus. There are several reasons you shouldn't look at your home as an investment, especially in today's economy.

An inefficient investment

The main reason not to buy a bigger or fancier home simply because "it's an investment" is that there are much better ways to put your extra dollars to work.

Real estate has generally appreciated around 4% to 5% per year on average, and this can be higher or lower depending on your specific location. Depending on what statistic you look at, home prices have historically appreciated at 3.4% to 5.4% annually over the past 20 years.

Compare this with an average annual return of 9.1% for an S&P index fund, 7.2% for the average mutual fund, and 7.16% for the ultra-safe 30-year Treasury, although it pays less these days, around 3.65%.

Simply put, the risks are not worth the rewards.

Don't forget about mortgages

Your mortgage will cause you to pay much more for your home than the agreed-upon price, which also will eat away at your returns. Let's say you buy a $300,000 home and put 20% down, so you finance the remaining $240,000 at 4.5% (about today's rate for a 30-year mortgage). If your home appreciates at 5% annually, by the time your mortgage is paid off, it should be worth around $1,296,583.

However, because you are paying interest on your mortgage, when you add up all of the payments, you're really "paying" a total of $497,794 for the house. This implies a total return of $798,809 after 30 years, or just 3.2% per year on an annualized basis.

Poor risk/reward ratio

When you consider the risks involved with owning a home, it is not really a prudent long-term investment. In fact, the risks associated with owning a home are quite comparable to the level of risk associated with investing in an index fund. From top to bottom, the S&P lost 58% of its value before bottoming out. It has since recovered to a level that is 13% above its pre-crisis peak.

In contrast, the U.S. real estate market fell about 35% from its peak and is currently well below its pre-crisis peak.

There are good investments in real estate, but your home isn't one of them

If you really want to "invest" in real estate, the only worthwhile way to do it is to buy an actual investment/rental property. These can be very lucrative if done correctly. In theory, an investment property should be a house (or apartment building, commercial space, etc.) that you buy and someone else pays for over time.

To sum it up, there are several ways of putting your investment dollars to work that simply make more sense than buying your own home. It just doesn't make sense for "investment" to be the reason to spend more on a house in the hopes of producing long-term gains.

For more information on apartments in Waldorf, MD contact Abberly Square.

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Daily Finance


Renting in an Apartment Community is a Great Idea for Many

Joseph Coupal - Thursday, June 08, 2017

Abberly Square, Waldorf, MDHome ownership may still be the American dream, but it is not necessarily for everyone. But There are many factors as to why people choose to rent. One of the biggest reasons is the economy.

With the economy the way it is, a lot of people are moving from homes to apartments because of the convenience and the price point. By living in an apartment community with all of the amenities renters are looking for without having to pay the premium prices of a home, is exactly why more people are renting.

The key word there: amenities. Those are the perks of renting at a particular property provided by apartment communities. Laundry, pools, fitness centers, and 24 hour maintenance and security, are just some of the features of different apartment homes. But the list doesn't stop there.

Some of the apartment communities will come with garages, other provide social events for their residents. Many are located in downtown areas or in areas where homes are not affordable.

Location and amenities are definitely important concerns when you are deciding where to rent, but when it all comes down to it your new apartment has to fit your budget.

There are varying floor plans to fit into many budgets. Whether the renter wants a studio, a 1 bedroom, a 2 bedroom, a 3 bedroom or even a townhouse there are styles to fit their needs and more importantly, their budget.

Another additional cost to keep in mind is renter's insurance, which may or may not be required by the apartment community, but is still a very good idea. Renter’s insurance is very inexpensive to get. Renter's insurance protects the renters belongings so if something like a fire does happen, they are protected, they're belongings are protected.

One last thing to look for when renting, especially when it comes to living in an apartment community, is to make sure the property is owned and operated by the same company. That helps ensure someone will be there for you, should the need arise.

For more information on renting an apartment in Waldorf, MD, contact Abberly Square Apartments.

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YNN


Renting or Buying: Which is Better?

Joseph Coupal - Thursday, June 01, 2017

Abberly Square, Waldorf, MDMany homeowners research the heck out of buying a first home: what to look for in a house and location, what kind of mortgage to get, programs for first-time homebuyers, what to ask the sellers, and so on. But, it’s the stuff they missed and didn’t expect in the home buying process that they remember the most. Here are some things to really think about when considering if renting or buying is better.

You Don’t Have to Buy a Home

It used to be that homeownership was a given, just like getting a college education, getting married, and having kids. It was said that property investments were the most reliable investments you could make.

After the Great Big Housing Debacle, many people are thinking differently and choosing to rent an apartment in Waldorf, MD instead of own. Depending on where you live and your lifestyle/plans for the next few years, renting could be better for you. Both renting and homeownership are fine choices if you run the numbers for your particular situation.

Be sure to take a deep dive into the question of whether renting or buying is better. Here is what Trent writes on The Simple Dollar:

  • Don’t buy a home because that’s what you’ve been told you’re “supposed” to do.
  • Don’t buy a home because that’s what you think you’re “supposed” to do.
  • Don’t buy a home because it’s a good investment for the future. It’s really not all that great of an investment.
  • Don’t buy a home because you might get married and have kids someday and you need the space for this hypothetical future.
  • Don’t buy a home because you think it will lead you to some sort of idealized suburban life. A home won’t change who you are.
  • Don’t buy a home because you’re trying to “keep up” with someone in your life. It’ll make you fall further behind in the long run.

In other words, buying a home is a financial decision, not an emotional one (more on that in a bit).

For more information on renting in Waldorf, MD contact Abberly Square.

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Excerpts - lifehacker.com


Think Before you Buy - Waldorf, MD

Joseph Coupal - Friday, May 26, 2017

Abberly Square, Waldorf, MDHave you heard this before: Renting is like throwing your money away. Buy a house now because home prices are rising. A house is the best investment you can make. Owning a home is the American dream.

Sound familiar? Like marriage and parenthood, buying a house means you can shed the label “recent college grad” and call yourself grown-up.

But a home is not necessarily the best investment you can make. And even if you can afford it, it may not make you happy.

Peel back the packaging on those reportedly low interest rates. Those are reserved for people with stratospheric credit scores, 20% for a down payment and minimal student loans.

The foreclosure crisis disproportionately affected young people and people of color. Plenty of college-educated, employed people whose mortgages fell underwater and, credit rating be damned, they opted to abandon their homes.

Home prices are rising now, and Zillow estimates they will go up 7% in the next 12 months. But from peak to trough, most homes lost a large percentage of their value.

Recent studies show that high rates of homeownership can actually dog a region’s economic growth. A May study showed that when a state doubles its homeownership rate, a doubling of unemployment later follows. An increase in homeownership led to lower levels of labor mobility, longer commute times and fewer new businesses.

If you plan to stay in a home for less than 3.6 years, it’s better to rent than buy.

“Many say you shouldn’t use a house as an investment. Investing in the stock market or some other vehicle is a better choice,” said Svenja Gudell, senior economist at Zillow.

For more information on renting apartments in Waldorf, MD, contact Abberly Square.

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Seattle Times


Tips for Renting Without Going Broke – Waldorf, MD

Joseph Coupal - Thursday, May 18, 2017

Abberly Square, Waldorf, MDPersonal finance experts suggest you keep your rent under 30 percent of your income. But for many young professionals in cities these days, that's a big ask.

Many have gone through the process of finding an apartment on a budget, here are some top tips:

1. Know your deal breakers

You're probably not going to have your own one-bedroom apartment. But being on a budget doesn't mean you have to compromise your quality of life.

Take a minute and brainstorm what you would like and what you couldn't stand.

Here is a recommended list of things to consider:

  • Your commute time
  • Whether the apartment is smoking or non-smoking
  • How you feel about pets
  • Distance to the nearest subway or bus stop
  • If you want a quiet or lively place to live
  • If you need a stove, oven, dishwasher, elevator or on-site laundry
  • What you're looking for in a roommate
  • How you feel about overnight guests

Additionally, think about whether or not you can afford to use a real estate broker.

If you're on a tight budget, chances are you won't be able to. Brokers in major cities generally charge 10 to 15 percent of the annual rental fee. For a $1,200 apartment, that's between $1,440 and $2,160. If you can't afford a broker, use keywords such as "no broker" or "no fee" when looking at listings.

2. Download real estate apps

To stay up to date on the listings, download apps like Craigslist, StreetEasy, Trulia and Zillow. Checking them daily is a convenient way to cast a wide net, since you'll find unique listings on each. If the app offers certain benefits to people who create an account, such as the ability to save your searches or keep track of your favorite listings, take advantage of them. Your search will be a lot easier.

In addition, enable notifications. You'll be pinged every time a new listing that matches your criteria is added. When thousands of other people are searching for places, responding even minutes earlier than others can make a huge difference.

3. Save yourself time and stop looking for a studio

Finding an affordable studio apartment in a city like New York is extremely difficult, if not impossible.

On the off chance that you do find one, it almost always has some sort of major catch: It will be the size of a closet or it won't have its own bathroom. If you have roommates to share an apartment with, you really open up your options.

4. Join Facebook housing groups

There are dozens of Facebook groups out there where people post apartment listings. It makes searching for an apartment more personal, since you can check out the lister's social media profile and put a face to the name.

Look up your city name along with "apartments" "listings" or "housing" and you're sure to find a bunch of groups. Request to join them.

5. Post a roommate ad

The more you broadcast your search, the more responses you'll get. So post what you're looking for on your Facebook profile and tell your friends. If you don't want to share your exact price point, you can always give a range or use terms like "on a budget."

In these posts, include your budget, ideal neighborhoods, a bit about yourself and what you're looking for in a roommate.

To stay safe while doing this, don't respond to anyone who asks for money or personal information — those are red flags.

Ask for multiple social media account links from the person to verify that he or she is real. You could also arrange a video call before meeting up.

6. Draft a post you can use to reply to apartment listings

Responding to dozens of listings can be exhausting. To avoid apartment-hunting burn-out, draft a general email response that you can copy and paste, with minor tweaks, to each listing that interests you.

The response should include a bit about yourself, your ideal move in date, what you're looking for and any questions you have about that listing.

7. Stay safe

Never send money, your social security number or any other personal information to strangers, no matter what they say. Seriously, there's a huge market out there of people trying to scam you.

Don't sign any documents or turn over any cash until you do some of your own investigative research. Search the person's name and company with the word "fraud," "scam" and "lawsuit" to see if anything comes up.

When going to view an apartment, always meet in a public place and tell a friend where you're headed. If you have any doubts, do more digging or just hold off. There will be more listings tomorrow.

8. Look into new areas

Finding an affordable apartment in the posh parts of any city is extremely difficult, even if you're planning to share the space. Many young professionals are moving to the less gentrified areas for this reason.

If you look at less trendy but still vibrant neighborhoods you'll find more listings at competitive prices. The commute might not even be that much worse, and the local food might be far better.

Find out where young professionals in your area are moving and do some research. Look into where the laundromats, parks and grocery stores are, what the crime rate is and where the nearest subways or bus stops are. Visit. You might just find a good fit.

9. Don't make impulse buys

Looking for an affordable apartment is very stressful. Remember to take your time and relax. After you see an apartment, walk around the neighborhood. Do you like it? Could you see yourself living there?

If the answer is "Yes," follow up as soon as you can, as apartments go quickly. If the answer is "Maybe," think about it more. Don't allow yourself to get swept up by the panic.

Here's to finding a good place on a budget.

For more information on apartments in Waldorf, MD contact Abberly Square.

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CNBC


Why Retire in Waldorf, MD

Joseph Coupal - Thursday, May 11, 2017

Abberly Square, Waldorf, MDNearly 100 years ago, a reporter for National Geographic nicknamed Maryland “America in Miniature” because of its varied landscape, and to this day the name has stuck. You can ski in the mountains in the west, sail on the Atlantic Ocean in the east and hike through lush, creek-lined rolling hills in the middle of the state. One of the big pluses of retiring here is that geographically it is a very diverse state.

Though Maryland is one of the smallest states in the nation, those seeking to retire near water have more options here than in many other states.

Maryland touches three major bodies of water—the Chesapeake Bay, the Potomac River estuary and Atlantic Ocean—and the state boasts roughly 4,000 miles of shoreline, 400 lakes and dozens of rivers and creeks. For retirees, this means easy access to activities ranging from fly-fishing and boating to kayaking and canoeing.

The weather tends to be mild and the cultural opportunities, abundant. Baltimore, which is undergoing substantial revitalization, has an opera, symphony and local theater; Annapolis, the state capital, is home to more 18th-century brick buildings than any other city in the nation as well as myriad museums; and many residents of the state are just a short drive or train ride from Washington, D.C.

Living in Maryland, however, can be expensive. It's not a cheap tax state. Sales taxes tend to be higher than average, estate taxes are high, and Maryland’s General Assembly recently raised the gas tax.

On the flip side, Maryland residents tend to be able to afford it: The state boasts one of the highest median incomes in the nation, and Potomac, near Washington, D.C., has the highest median income of any community in the nation.

For more information on apartments inWaldorf, MD contact Abberly Square.

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marketwatch.com


Should You Rent or Buy A Home? - Waldorf, MD

Joseph Coupal - Thursday, May 04, 2017

Abberly Square, Waldorf, MDHousing prices and interest rates are both rising. A lot of people are considering whether or not they should buy a home. But is homeownership the right choice for you and your finances? The answer of course, is "it depends." However, for many there is a clear answer based on where you live, how much money you have saved, and what your future plans are.

The "Rent vs. Own" debate rages on. Here are some important factors you should consider to help determine whether renting or owning a home is the right decision for you.

1. Basic Market Trends

The three most important criteria in setting the value of a home are "location, location, location." That is true, but you might want to add: "timing, timing, timing."

Anyone who watched the gut-wrenching rise and fall of the housing market during the past 10 years can knows that timing has a lot to do with if buying a home becomes a good investment or an anchor tied to your finances.

You want to avoid buying a house at the peak of a housing bubble, obviously!

But how to avoid it? To help you navigate these market variations, use the "price-to-rent" ratio. This is a formula that takes into account the price of renting versus the cost of buying in your area and gives you a sense of whether the market dynamics favor buying or renting.

Also remember that interest rates for mortgages fluctuate over time and it's always better to lock in a low interest rate if you can.

2. Your Financial Picture

One of the main considerations you have to make is this: does your current financial picture put you in a strong position for home ownership? If not, then buying a house will not be a good idea no matter what the market trends indicate.

Evaluate your finances and see if you're prepared for homeownership. Sit down and look at all your financial accounts as well as your income and expectation of future earnings and job security.

First, look at any debt you have and calculate how long it would take you to pay it off. If you have a lot of consumer debt and especially if you're struggling to make your monthly payments, then this may not be a good time for you to buy.

3. How Much Do You Have Saved Up?

Assuming that you're not worried about debt paydown or losing your job, then the most important factor to consider is how much savings you have. Many home purchases require 10 or 20% as a down payment on a mortgage.

The right down payment amount and home loan amount for you will depend on the factors mentioned above, but in general it's better to have a lot saved up before you apply for a mortgage.

4. What Are Your Future Plans?

One of the things you always hear people talk about is that it doesn't make sense to buy a house if you plan to move in the next five years -- and this is absolutely true. Why? Because buying a house requires lots of fees and "transaction costs" -- these costs are unavoidable and can total up to 5 percent of the cost of the house or more.

It still depends on the individual situation, of course, but the general rule is to avoid buying if you expect you'll need or want to move anytime soon. For more information on renting an apartment in Waldorf, MD, contact Abberly Square.

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ABC News


Why Renting is Often Better - Waldorf, MD

Joseph Coupal - Thursday, April 27, 2017

Abberly Square, Waldorf, MDOnce you get your career going, you may begin to think about settling down; maybe you are looking for a place to live. One of the biggest questions is whether you should rent or buy your home.

For many, buying is one of life’s biggest aspirations. But for others, buying property doesn’t really have a place in their life. It can be difficult choice, and one that’s going to have a big impact on your bank-balance. There are pros and cons to both buying and renting.

Buying a home has been traditionally been the goal for many people. Once you’ve paid off your mortgage or mortgages, your home is your own. A home also represents a large chunk of your credit security.

Fundamentally, this is how many look at it: monthly mortgage payments may be a headache when times are tough, and it may be increasingly difficult to get one but at the end of the day you’re paying into something that you’ll eventually own outright.

The same cannot be said for renting, and this is the main criticism. However, there are many benefits to renting.

Firstly, you’ll need a much smaller initial down payment to secure an apartment. Provided you treat the property right, you’ll receive your deposit back in full at the end of your lease.

Secondly, you have flexibility and freedom. You can choose to move– in a completely different region –more quickly and easily than you would be able to if you owned a home.

Thirdly, the upkeep of any rented property is the responsibility of the landlord. Homeowners will have to pay for home repairs and ensure they have insurance coverage.

For more information on renting an apartment in Waldorf, MD contact Abberly Square.

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Economic Voice


Should I Rent or Buy? Questions to Ask – Waldorf, MD

Joseph Coupal - Friday, April 21, 2017

Abberly Square, Waldorf, MD“Should I buy a house?” This life-changing question is not something you casually ask the magic eight ball and get hit with a vague answer like, “Concentrate and ask again.” Instead, there is an empirical way to find out if you should buy a house or rent an apartment in Waldorf, MD. Ask yourself these questions below.

Question No. 1: Can I afford a home?

The first step is to find out whether you can buy a house given your current financial situation. A calculator will help you figure out just how much house you can afford. However, a rule of thumb is that you should spend no more than 33% of your income on housing.

Question No. 2: Is it better for me to rent or buy?

The whole “rent or buy?” question depends on which housing market you’re in, because inventory can make a huge difference.

Question No. 3: How long can I stay put?

Generally the longer you live in a home, the smarter it is to buy rather than rent. Short-term stays? Renting might make more sense. The reason: When you buy a home, you’ll pay closing costs that can total thousands of dollars, plus most of your early mortgage payments go toward interest rather than whittling down the principal (the actual amount you owe on your home). As a result, as a rule of thumb, home buyers should plan to stay put at least five years. If you might move before that point, you should stick with renting instead.

Question No. 4: Are my retirement savings on track?

We know, retirement seems a long way off. Still, it’s crucial to start storing those nuts early. So if you’re neglecting your 401(k) to funnel all your funds toward a home purchase that may not be the best allocation of resources (particularly if your employer matches funds, which is free money). Another reason: Setting aside money in a retirement account must be done the year you earn that income; you can’t go back later with a wad of cash and hope to squeeze it in.

When in doubt on what to do, consult a financial adviser who can help you strike a balance between saving for a house and your future simultaneously.

Question No. 5: Am I ready for the responsibility?

With rentals, you can just call your landlord to fix that leaky faucet. With a home you own, it’s all on you. So ask yourself if you’re willing to forgo weekend bar crawls with friends in lieu of mowing the lawn or patching the roof.

Ask yourself the following: “Do I have the time, resources, and desire to take on home maintenance and repairs as well as yard maintenance?” For more information on apartments in Waldorf, MD contact Abberly Square.

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realtor.com


It May be Better to Rent, Even if the Numbers Say It's Cheaper to Buy – Fredericksburg, VA

Joseph Coupal - Friday, April 14, 2017

Abberly Square, Waldorf, MDIf you're wondering whether you're better off financially renting or buying a home, you can easily find an app for that.

Mortgage calculators all let you input the relevant numbers to determine which option makes more economic sense.

But studies and numbers don't always tell the whole story, and the cheapest option in a state isn't always the cheapest option for an individual.

You shouldn't buy if it doesn't fit your lifestyle. If it's really important to you to be going on exotic vacations ... it might be better to rent. Renting is also ideal for someone whose life is unsettled or a person who expects to relocate in a short time.

You don't want to buy if you don't plan to stay put for a while. In most markets, it's going to take around five years to offset the cost of buying.

In the short term, buying nearly always costs more. There's the down payment and mortgage closing costs, plus whatever money you spend to customize the house and get it ready for you. Then factor in the regular costs of homeownership, including homeowners insurance, property taxes and repair costs, and that can add up to a big chunk of change in the first few years of owning a home.

It's always more expensive in the short run to own rather than rent.

But if you crunch the numbers and they say buying a home is the right move, should you? Not always. Here are three good reasons not to buy a house, even if the all apps and calculators say you should.

You Don't Want the Responsibility

If you own a home, fixing anything that breaks is your responsibility. That could be an easy and inexpensive fix, such as calling a plumber to repair a leaky toilet, or a complicated and costly repair, such as replacement of the water and sewer lines from your home to the street.

When you buy a house, the first thing you discover is your landlord isn't going to fix the water heater when it breaks. Are you entirely ready for the requirements?

Not only do you need to have the money to make the repairs, you need to have the skill to find and negotiate with contractors and repair people. It's a lot of responsibility. Everyone should not buy a house. there are people who are emotionally not ready for it.

Your Life Plans Are in Flux

Even when buying seems cheaper than renting, you end up spending more if you sell quickly because of the costs of buying and selling. Buying a home then moving six months later to take a new job or get married can be costly.

The "in and out" costs are estimated at 10 percent of the home's value, though that varies by home and location. If appreciation is 3 percent a year, it will take you four years to break even, if you didn't spend any significant money on improvements or repairs.

The Great Recession also was a good reminder that there is no guarantee real estate will rise in value. People who bought or refinanced homes at the peak of the market in 2006 found themselves trapped in homes that were worth less, sometimes much less, than they owed on their mortgages. If they sold, they would have had to pay the lender tens of thousands of dollars.

Houses are selling quickly now in most cities and are expected to continue gaining value in 2017, but that's not always the case. If you invest in the stock market, you can sell your assets and have your cash in a few days. Real estate has a much longer time frame.

People whose lives are uncertain may not want to buy. Owning a home could make it harder to relocate for a better job, engage in long-term travel, care for aging parents out of state or unite with long-distance lover. Think hard about your current lifestyle and how it may evolve in the near future before you sign on the dotted line.

You Won't Have Any Savings After You Buy

People often forget that the down payment and closing costs are just the beginning when you buy a house or condo. Even homes in solid condition need maintenance and repair, from painting to new roofs to new appliances.

Every homeowner has a story, often multiple stories, of air conditioners and furnaces that needed replacing six months after they moved in, burst pipes that flooded the basement and washers that stopped forever in midcycle. Annual home maintenance and repairs easily can run 1 to 4 percent of the cost of the home, according to several real estate websites and Freddie Mac.

Houses are expensive and things break. You need to have a healthy emergency fund and be able to add to it.

Some lenders require homeowners to have savings as a condition of approving their mortgages. Even if your lender doesn't, you don't want to spend your last cent buying a home, especially if you'll be stretching to pay the mortgage, taxes and homeowners insurance.

You don't want to come out of the process of buying without at least three months of savings.

For more information on apartments in Waldorf, MD, contact Abberly Square.

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Yahoo! Finance



Abberly Square Apartment Homes

2350 Eden Woods Drive, Waldorf, MD 20601
844-652-1446 240-585-7263 Email Us View Map