1) Calculate the Ratio of Price-to-Rent
This is a term used a lot at Shearer Realty and around Charlotte’s real estate.
Price-to-rent helps us identify what option makes more reasonable sense. This will help you when examining your options regarding condos for rent in Charlotte, NC.
The method is not as hard as it sounds. If you find a condo in your ideal area for sale and another condo for rent. Also noted is that they should be as close as possible to each other as in things like bathrooms, bedrooms, and similar square footage.
Let give an example:
- You find a nice $200,000 condo for Sale
- Then using the method you found a similar condo for rent this about $1,000 per month (Which is $12,000 annually)
- Then you Divide $200,00 (price) by $12,000 (ratio), giving you a Price-to-Rent ratio of 16 to 7.
A ratio of anything higher than 20 means costs of condo ownership will exceed the cost of renting the same type of condo.
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2) Factor Your Household Budget
Your household budget is vital in whether you are buying or renting a condo.
We usually say that if the prices of condos in a certain location within Charlotte exceed what you make in 3 years.
If over it may be a sign that they are overpriced in your desired location.
3) How Long Are You Staying
What most people forget and also a considerable factor. Questions you must ask yourself like stability of your job and possible opportunities that require you to move. If you are not married and when the day comes you decide you want to move closer to your parents because of kids.
It really depends on how mobile you this is why renting a condo is great as it offers you flexibility to relocate if the need arises. Take not that if you purchase condo, you may be stuck in that location until the loan of 20+ years is paid off, unless you can find a buyer that will give you what the property is worth. They both have have benefits and it comes down to you and your needs.
4) Identify What You Need
Need an additional room or want to make the kitchen bigger? Constructing a new room or tearing down a wall is an available option for you when you purchase a condo. Renting a condo has you stuck with the space and layout you have.
Owning a condo will give you the freedom to do things like remodeling the kitchen, or expanding the master bedroom.
5) Figure the Immediate Costs
As we get down to nails and tacks and it is vital to know how much you will have to pay.
Normally condos for rent in Charlotte, you must pay the last and first month’s rent and the security deposit. So if you found a condo and the fee is $2,000 a month, that means you would need to come up with $4,000 before you could move in.
Buying a condo involves making a down payment, usually 10% of the purchase price. There are also other fees to consider such as title fees, bank fees, and more, which can reach around $5,000 to $7,000 area.
Costs of ownership can ascend to around $20,000 to $30,000. But of course, there is a multitude of lending and purchasing a condo to help you in this process.
6) Long-Term Costs and After…
If you plan on being in on your condo for the long haul like most people. That is great news is you can pay off as you build equity. You can never make a return on renting a condo as your money is gone forever.
Something to consider as well is also homeowners insurance. Renters insurance is surprisingly cheap and can be found at prices around $20 to $30 a month. Homeowners’ insurance policies on the same type of condo can be as much as $2,000 annually. Whatever you choose, it is necessary for you to have an insurance policy.
If you have any more questions or want to buy or view what condos for rent in Charlotte, you can contact one of our Shearer Agents at (704)-567-8200 or here.