By Ila Josephs

“It’s a lot of money. Houses cost too much,” an open house visitor said Sunday. The cost of buying a house is indeed a lot of money. A home is the biggest single investment most people make in their lives, and it’s not just about money. Buying a house requires a real commitment — to paying the mortgage and property taxes, to putting down roots here and now, to investing in the future.

“Houses cost too much!” Generations of home buyers have said the same thing. During the 1930s, home prices outpaced buyers’ ability to pay, and the term for paying a mortgage was extended from 10 years to 30 so cash-strapped buyers could afford a house. (Now 40- and 50-year loans are available.)

My uncle brought his family to California during World War II in search of a job that paid better than farming. He found one in Long Beach and rented a house. After the war, home prices jumped as returning GIs brought their families to Southern California. Uncle waited for prices to settle back down. Thirty years later, he was still living in the same house and still paying rent. He waited … and waited … and ended up paying off his landlord’s mortgage instead of his own. Eventually, his rent for one year was the equivalent of the original price of the house. After 30 years, the landlord sold the house and made a huge profit. My uncle got an eviction notice.

Times change, but the landlord-tenant relationship doesn’t. Landlords set the rent to pay the cost of the mortgage plus other expenses and a profit margin. In other words, landlords invest in real estate to make money. Why else?

Renters who are willing to invest in their own futures can also make money. Instead of rent payments that increase every year, mortgage payments remain the same or vary slightly throughout the loan period and the property increases in value. I will be glad to show you why trading your rent-due notice for a mortgage payment book makes sense now and in the future.

To help offset current home prices, first-time home buyer programs can reduce the interest rate, help with down payment assistance and/or provide a “silent second” loan that might never have to be repaid. Local cities and counties offer a variety of programs to help average and lower-income people purchase homes.  

Whether you are a first-time home buyer or a longtime real estate investor, my team of experienced professionals can help you find the home that fits your needs. Email ila@Tarbell.com or call me directly at (909) 261-3541.