Many young people in Fort Lauderdale and the Broward County area may find themselves asking whether they want to own a home as soon as possible or rent a house or an apartment for the time being until they can get their lives more established.
There are several non-economic reasons people may want to buy a home. Many Floridians, for example, like the freedom home ownership brings, as homeowners do not have to follow the terms of what might be a very detailed lease agreement. On the flip side, someone may want to avoid the time and expense it takes to maintain a home. After all, for most residential properties, the landlord handles the maintenance.
Maintenance costs aside, buying and selling a home also costs a lot of money in terms of “transaction costs,” such as loan fees and other closing costs, including the real estate agent’s commission. The legal stakes are also higher in that there are more details to which people must attend and the sale is permanent; unlike a lease, someone cannot just walk away from a bad investment in residential real estate after a year or two.
The bottom line is a person buying a home will need to make sure they can sell it at a slightly higher price in order to cover transaction costs. Otherwise, the beauty of homeowner’s equity really amounts to nothing, as it gets eaten up in the costs of selling one home and purchasing another.
Source: Miami Herald, “Owning vs. renting: What’s better for your wallet?,” Sylvie Temblay, June 1, 2017