Most people reach the point in life where they ponder this important question: “Do I rent or do I buy?” For some, there really isn’t an option for the first few years of adulthood, as people are beginning careers and starting to build their savings accounts. However, once a South Florida resident builds a bit of financial security, they will often wonder where their money is best spent.
When housing costs are high, sometimes it makes more sense to rent then it does to buy. Higher purchase prices can mean higher down payments and higher monthly payments, and many people simply aren’t in a position to throw down that kind of cash in one real estate sale. Most of our readers know by now that the real estate market in South Florida is thoroughly on the rebound, so what would the answer to the “rent vs. buy” question be in the local area?
According to a recent report, despite the resurgent housing market in South Florida, it is still more economical to buy property than it is to rent. The report noted that a study focusing on the Miami-Dade County and Broward County markets was completed recently, and the results show that the monthly costs associated with renting property in the local area are higher than the costs for buying property.
A big advantage in buying property versus renting is that when someone locks in a rate through a fixed mortgage they will have less of a chance of seeing price fluctuations in the monthly costs. However, the recent report noted that if property values to continue to rise in the local area, as they have been for months now, the advantage of buying over renting could begin to erode. That is why any prospective buyers currently in the market for property may want to jump in now before prices go much higher.
Source: Miami Herald, “Buying a home in South Florida trumps renting, new study finds,” Martha Brannigan, Feb. 20, 2014