So… How’s the Market?
How is the market and what does that mean to you and your everyday life?
The market is doing amazing and we are going to dive into the financials of why everyone should buy a property in Colorado Springs this year!
If you are “renting the roof” over your head, the average rent for a 2-3 Bedroom/ 2 Bath condo, townhome, or apartment (Colorado Springs) in 2020 was $1,350
Average rent for a 2-3 bedroom house or patio home (Colorado Springs) in 2020 was $1,650
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If you would have bought the average 2-3 Bed/2 bath condo or townhome last year you could have paid $250,000 (more or less)
If the monthly HOA cost was $200 (which covers everything on the exterior, roof, stucco, grass, flowers, trash and snow removal and maybe even comes with a pool & workout room)
If you did 7% down payment - $18,750 (a Lender can show you loans with smaller down payments)
That house payment could look something like $1,200 per month ($920. principle/interest, $80. Property taxes/insurance and $200. HOA)
If you had a friend living with you, paying you $600 per month in rent your monthly house payment would amount to $600.00!!
If you owned that average condo/townhome all last year, it would have appreciated in value approx. 10.3% (as you can see from the chart) $26,000! ($250,000. X 10.3% = $25,750.)
Now it would be worth approx. $275,000! (with no updates to interior- if you did any updates it would sell for more)
If you sold that property, you would have made $26,000. Paying the same amount in rent you were already paying when renting with a friend.
Let’s look at some roughed-in numbers
Sell for $275,000.
Payoff of your mortgage approx. - $230,000.
Approx. 6.5% Costs in selling - $17,875 (title insurance/realtor/recording/closing fees)
$275,000. - $230,000. = $45,000. - $17,875. = $27,125 (not all profit yet) Now we need to count as a payback the $18,750. down payment you made when you purchased- $27,125. - $18,750 = $8,375 profit for you living there!
What does this mean to your everyday life?
If you’re already renting with a friend, at $1,200 per month, (splitting ½ of rent) your monthly cost is $600. But at the end of the year, that money bought/gained you nothing (and when your lease is up, you can expect the customary 4% rental hike per year/$48. per mo.)
If you would have spent the very same money ($600. per mo. X 12 months= $7,200) but owned, you would have made/gained an additional $8,375. that year! In essence, you were paid to live there or another way to look at it. You got to live there free for a year AND an extra paycheck bonus when you moved/sold for $8,375.
You would walk away from the closing table with an approx. check of $27,125.
What new opportunities would that mean for you?
Buy another property in a different neighborhood, better amenities, closer to work, something with a great view?
Buy another property, having more money to put as a down payment, so house payment is less and you don’t need to share with a renter?
Upgrade with your profits from a townhome/condo to a house with a yard?
The Possibilities are endless- time to start making your dreams come true!
As always, the goal of our blog will be to offer Intel, Influence & Inspiration for all your Real Estate needs.
Let us know how we can assist You!
Lei Lonnie Watts 719-761-0474 Josh Watts 719-271-6774