Rising rent rates push tenants to become landlords – CBS Detroit

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(CBS DETROIT) — It is one of the most important financial decisions you can make and contributes to personal and community stability.

Becoming an owner comes with many responsibilities, but also many rewards.

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Terance Bowers of Bowers Realty says home ownership gives you more financial leverage than renting.

“The inventory is very low so you’re dealing with a lot of different tenants looking for the same type of properties, okay, even if you’ve seen an affordable property you’ll probably be 20 out of 30 people queuing, Bowers said.

As rent rates rise in Detroit, tenants are starting to seriously consider terminating their lease for a home loan.

“Let’s say if you get a starting house theoretically for $100,000 in an area where properties are selling for $150,000, then when you invest, say $5,000 or $10,000, you’ll see it if you resell it on the market,” Bowers explained.

The Detroit Housing Counseling and Homeownership Project shows the median household income to be $30,894 per year.

According to rent.com, the average price for a one-bedroom apartment in Detroit is around $1,200.

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This means that the average renter in the city spends almost 50% of their income on rent.

Bowers says you could potentially save hundreds of dollars a month by investing in a $100,000 starter home with a 5% interest rate.

“You should be looking at around $1,000 or $900 a month depending on what kind of interest rate you can get now, the higher your credit the better the income, through different systems you will be able to get better interest rates. ‘interest,’ Bowers said.

Michigan State Housing Development Authority offers down payment assistance programs for first-time home buyers.

Visit here for more information.

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