All posts tagged Rent vs Buy

Buy vs. Rent

by Justin Miller on February 24, 2012 in Mortgage Education 101 with No comments

 

 

 

 

 

 

 

This was a great article in the Sun Sentinel , “Rent vs. buy: Decisions comes down to job, finances.”  If you are comfortable with your job and have the money saved for a down payment, closing costs, prepaids, and reserves leftover after closing it couldn’t be a better time to buy in Fort Lauderdale and South Florida as rents continue to rise.

Interest rates are at historic lows and once they do rise they are going to jump and I would imagine the jump will be a half a point or more.  Keep in mind every 1% increase in interest rates reduces your buying power by 11%.

Reasons To Buy A Fort Lauderdale Home

by Justin Miller on May 25, 2011 in General News, Mortgage Education 101 with No comments

I have said over and over again that owning a home shouldn’t be viewed as an investment but as a lifestyle. Owning a home isn’t for everyone but if you plan on staying in the same place and are confident with your continued employment now is a great time to buy. It’s especially true in Fort Lauderdale and South Florida where home prices have come down dramatically and interest rates are at historic lows.

I could not have said it better then they did at KeepingCurrentMatters.com:

The Most Important Reasons to Buy a Home

When we talk about homeownership today, it seems that the financial aspects always jump to the front of the discussion. However, the study shows that the four major reasons a person buys a home have nothing to do with money. The top four reasons, in order, are:

  • It means having a good place to raise children and provide them with a good education
  • You have a physical structure where you and your family feel safe
  • It allows you to have more space for your family
  • It gives you control of what you do with your living space (renovations and updates)

http://kcmblog.com/2011/05/23/national-housing-survey-what-america-thinks/

To Rent or To Buy

by Justin Miller on March 29, 2010 in General News with No comments

I have written a lot about this lately but here is another article geared towards those retiring but it does show the average rent and mortgage payment for Miami.  Remember that you want to look at the price to rent ratio.

For anyone weighing a move, one of the easiest ways to approach the buy-versus-rent question is to use the “price-to-rent ratio,” says Dean Baker, co-director at the Center for Economic and Policy Research in Washington, D.C.

http://online.wsj.com/article/SB20001424052748704541304575099882517652948.html?mod=djemITP_h 

More On Renting vs. Buying

by Justin Miller on March 18, 2010 in Mortgage Education 101 with No comments

Again pay attention to the price to rent ratios which is your city’s median home price divided by the median annual rent.  I can’t find this in the online article but in the print magazine has some information about buyers and thinking long term.  It states to not overestimate the value of tax breaks that come with home ownership.  Many forget about the standard deduction you get whether you own a home or not. 

The NAR suggests you plan on owning a home for ten years to not only recover your costs, but also to realize a meaningful profit.  Remember though, owning a home is a lifestyle. 

http://www.kiplinger.com/columns/starting/archive/2005/st0714.htm 

When Owning A Home Doesn’t Pay

by Justin Miller on February 1, 2010 in Uncategorized with No comments

As I have said time and time again, not everyone should own a home.  Many feel that because they pay $1,000 per month in rent and the payment for owning a home would be the same that they should buy.  That isn’t correct.  Owning a home is a lifestyle. 

“When interest expense is taken into account with the costs of maintenance, property taxes, natural disaster insurance, PMI insurance, closing costs and brokerage fees, it becomes evident that the costs of owning a home are a heavy financial burden.”

Make sure to always consult a mortgage professional before buying.  I personally think that not enough people do their research ahead of time.  If you are thinking of buying in the next year or so you should get pre-approved now.  This will help you to plan accordingly and see what you need to do to put yourself in the best position when it comes to buying a home. 

The article below is very informative but the part that really stuck out to me was about using the different household income multipliers.  The median income for Broward, Palm Beach, and Miami-Dade County is $59,200.  And let’s say rates are at 5.125% today.  You would take the multiplier from the chart, 4.2733, times the median income of $59,200 which would give us a median home price of $252,979.36.  The median price should not exceed this.  According to the National Association of Realtors the median sales price in the 3rd quarter of 2009 was at $217,000.  Pretty cools isn’t it?

http://finance.yahoo.com/real-estate/article/108679/when-owning-your-own-home-doesnt-pay?mod=realestate-buy

Rent-To-Buy Ratios Continue To Improve

by Justin Miller on August 11, 2009 in General News with No comments

This means that it is more affordable to buy.  If you take a look at your tax adjusted mortgage payment and compare it to your rent you will see just that.  I can put together this for you with my Rent vs. Buy calculator. 

http://blogs.wsj.com/developments/2009/08/10/rent-to-buy-ratios-improve-does-it-make-sense-to-buy-again/ 

Renting vs. Buying A Home

by Justin Miller on July 22, 2009 in Conventional Loans, FHA Loans, General News with No comments

That is a good question and I have a great calculator that can show you which makes more sense taking into account your tax adjusted mortgage payment and appreciation (yeah, it’s been awhile since we heard that word).

 

Many people are seeing gap between the cost of buying and renting narrowing. 

“For Americans debating whether to buy or rent their homes, the scales are tipping toward ownership. Because of the slide in home prices, low interest rates and tax incentives, renters are realizing they could handle a mortgage for a just little more money.”

http://www.msnbc.msn.com/id/32051101/ns/business-real_estate/ 

Just Another Reason To Buy Now

by Justin Miller on May 10, 2009 in General News with No comments

Rents are increasing.  According to MarketWatch, Florida is a state hit hard by foreclosures, and now apartment rents there are on the rise, according to a new report released on Thursday.

http://www.marketwatch.com/news/story/story.aspx?guid=%7B1C5ACE3A%2DCD16%2D41DD%2D92E8%2DF353094C22C5%7D&siteid=rss 

Rents Catch Up With Mortgage Payments

by Justin Miller on February 25, 2009 in Conventional Loans, FHA Loans, Interest Rates with No comments

It’s said that when rent and mortgage payments are around the same amount that changes start to occur which can mean we are close to or at a bottom.  I hope that is true and here is another reason to BUY NOW.  The WSJ reported that the relative cost of owning versus renting is swinging back in favor of homeownership in some U.S. markets, buoyed by several quarters of sharp declines in home prices.

 

http://online.wsj.com/article/SB123552129423664663.html