By Amanda Reseburg
The real estate market has been a bit like the Wild West in the last few years. A fast and furious sellers’ market at the tail end of 2021 gave way to rapidly rising interest rates and a slowdown of sales across the board. Couple that with rising rents in nearly every state, and it could leave people scratching their heads as to what is the better option: to rent or buy?
Marlo Richardson, serial entrepreneur and founder of the new hedge fund Business Bullish Investments, feels that it should always be considered a good time to get into the real estate market as a buyer, but that strategies need to shift with the changing times and market fluctuations.
“The number one factor that needs to be considered is affordability,” Richardson offers. “Renting may sometimes appear to be cheaper than buying but oftentimes you need to see what is included in the cost of rent (utilities, trash, cable). When deciding to buy, a down payment and reserves will be very important. You also should consider the location and the resale value based on the price paid.”
The Benefits of Renting
Rental prices have skyrocketed in the United States. In Richardson’s hometown of Los Angeles, the average rent price is a hefty $2,786, with an average apartment size of just over 789 square feet. Similar prices can be found in other metropolitan areas, such as San Francisco, Seattle, New York City, and Miami. These high rents have made it difficult for people to afford even the most standard of housing.
Still, many people lean on the rental option because they believe they would not be able to afford the down payment on a home. Richardson cautions people not to assume home ownership is completely out of reach. “Many people choose to rent because they cannot afford what they believe will be the down payment. The truth is there are many great loan programs out there that can allow someone to get into a house for less than what a potential rental deposit may be,” she says.
Choosing to Purchase
Even with interest rates staying high, it could still be a good time to buy, for either yourself or as an investment opportunity. Richardson stresses the importance of buying low.
“Short-term real estate projects are great if you are looking to invest quickly and receive a return quickly. Long-term real estate purchases can provide both monthly incomes and equity growth long-term. The important factor on both is to buy low,” she says.
Through Business Bullish Investments, Richardson hopes to help lower-income members of minority communities gain access to the real estate market and investments. She suggests that people interested in dipping their toes in the real estate investment waters consider investing with others such as Business Bullish Investments. When investing in funds, credit scores and savings are not an issue. When looking to invest individually, you must work on your credit score and seek pre-qualification from a bank.
No matter what route people choose, they should research all the available options and think long-term rather than short-term affordability. If history is any indication, interest rates, prices, and availability of real estate will consistently be in flux. Thinking like a savvy investor and striking at the right time may be one’s path to real estate success.
