Abberly Village Apartment Homes

1000 Abberly Village Circle, West Columbia, SC 29169
Call: 833-334-9767 (803) 936-1012 Email UsAbberlyVillage.PropertySite.HHHunt@aptleasing.info View Map

Opens: Monday-Friday: 9A-6P | Saturday: 10A-5P | Sunday: 1P-5P

West Columbia SC Apartments Blog

Rent to Make Money

Joseph Coupal - Friday, September 02, 2011

If you are relocating to or moving within South Carolina, consider renting an apartment in West Columbia, SC. There are many economists out there that believe renting might be better than buying.

Here are some reasons for renting. Businesses are great investments while houses are poor ones, so I'd rather rent the latter and own the former.

Stocks versus houses: Returns

Shares of businesses return 7% a year over long periods. That’s subtracting for inflation, gradual price increases for everything from a can of beer to an ear exam. (After-inflation, or "real," returns are the only ones that matter. The point of increasing wealth is to increase buying power, not numbers on an account statement.)

Shares have been remarkably consistent over the past two centuries in their 7% real returns. In Jeremy Siegel's book "Stocks for the Long Run," he finds that real returns averaged 7% over nearly seven decades ending in 1870, then 6.6% through 1925 and then 6.9% through 2004.

The average real return for houses over long periods might surprise you: It's zero.

Shares return 7% a year after inflation because that's how fast companies tend to increase their profits. Houses have their own version of profits: rents. Tenant-occupied houses generate actual rents, while owner-occupied houses generate ones that are implied but no less real: the rents their owners don't have to pay each year.

House prices and rents have been closely linked throughout history, with both increasing at the rate of inflation, or about 3% a year since 1900. A house, after all, is an ordinary good. It can't think up ways to drive profits like a company's managers can. Absent artificial boosts to demand, house prices will increase over long periods at the rate of inflation, for a real return of zero.

For house returns over the next 20 years to match those over the past 20, the government and private lenders would have to "up the ante" by relaxing borrowing standards further. Given the recent attention paid to swelling foreclosures, that seems unlikely. Real returns will probably turn negative over most of the next two decades.

Original article by smart money on MSN


Abberly Village Apartment Homes

1000 Abberly Village Circle, West Columbia, SC 29169

Call: 833-334-9767
Email UsAbberlyVillage.PropertySite.HHHunt@aptleasing.info
View Map

Opens: Monday-Friday: 9A-6P | Saturday: 10A-5P | Sunday: 1P-5P

$952-$1,431