Rent vs Buy in Miami>Question Details

Trulia Miami, Home Buyer in Miami, FL

Is it financially favorable to rent or own in Miami right now?

Asked by Trulia Miami, Miami, FL Wed Mar 28, 2012

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With the rent prices on the rise, and super low vacancy ratio in Miami, the rents are becoming financially less desirable. At the same time, the prices of properties are also rising quickly, so the buyers/tenants have to make a rather quick decision as to what to do right now. Many previous home owners can not buy due to their damaged credit (foreclosures, short sales, default during loan modification period, job loss etc.). Rent is the only available option for them (hence, higher rental pricing due to increased demand).

Overall, with the mortgage rates being as low as they are now, and the prices that are still affordable,
more and more people choose buying vs. renting. This decision often has to do with our real estate clients' employment, increasing family size or downsizing/buying a 2nd home property. Many buyers are out of state or foreign buyers, who first come and rent (testing waters), but later buy -finding all Miami has to offer irresistable...In any case, the real estate tax and mortgage interest deductions are great for tax write offs.

However, each person's situation is different when it comes to buying real estate.
The house will work out for a buyer with debt to income ratio under 36%.
The buyer will also need to have 3.5% (FHA) downpayment saved up for a house or a townhome, and
20% down for a condo. Foreign buyer can purchase cash or obtain loans with about 25% to 40% downpayment. In addition to that, there will be inspections costs, closing costs (sometimes paid by the seller), home and flood insurance (expensive in FL). There are unpredicted repairs that might come up once the buyer purchases his/her property - something to plan for. According to most financial gurus, it makes sense to have an emergency fund before you buy (from 3 months for a regular job to a year, if self-employed).

In my estimation, both purchase and rental markets are doing great in Miami right now.
Personal situation will be the key when it comes to a buy vs. rent decision right now.

Irina Karan
Beachfront Realty, Inc.
305-904-2355
IrinaKaran@gmail.com
2 votes Thank Flag Link Sat Mar 31, 2012
One of my " first time buyers" was looking to rent when she realized that she can afford to buy and pay less than what she would be by renting.She closed a few weeks ago and is very happy - for the first time she can make the house her own way.
The only way i would choose to rent in this market is if i had plans to move in less than 5 years.
You also have to consider your finalial consideration of course.
Best regards,
Rosie Morot- Gaudry
Realty World Center
305 586 2305
http://www.rosiemorot.com
0 votes Thank Flag Link Thu Mar 29, 2012
A sweeping question that depends on your NEEDS (1st) then wants ... If you're in real estate for the long haul 7 - 10+ years at least) then woning is way better. If you move around a lot say every 3 - 5 years or less keep paying rent. The only thing is you'll never build a real estate wealth portfolio doing that. And btw, a very wise old client of mine always advised about real estate, "buy a lot when you're young"! Trust this helps and feel free to call me at 305-546-5132 if you want to schedule your private interview. Best, Steve E
0 votes Thank Flag Link Wed Mar 28, 2012
Why Rent when Owning is cheaper?
Do you know how much you save in taxes by owning a home?
Need a creative outlet? Gardening, paint and decorating await your touch in this home. What is your passion?
Do you have a dream kitchen? Not in that rental you don’t. Come see what this home has to offer.
Buy Now, lock it in and smile. Interest rates are at record lows.
When you own your own home you pick the colors. Tangerine or peacock blue – what’s your color?
I’ve got 10 reasons why owning this home is a good thing. How many can you name?
Did you know you can start building equity for $50?
What if I could help you buy a house with payment lower than your rent?
Think you can’t afford to buy a home? You can’t afford not to. How would you life be different if you owned this home?
Pet deposit, no pets allowed, pet fee … forget all that and welcome Fido to your own home!
Rents usually go up but house payments stay the same with a fixed interest rate. Be your own landlord.
You upgrade your software, why not upgrade your home?
My dad always said “I wish I had bought that house.” This is “that” house.
How do you know when home prices have hit bottom? When they go back up. The time to buy is now.
There is never the wrong time to buy the right home.
The average renter moves every 5 years and has nothing to show for it. Buy this home now and you stand to make a profit.
THIS IS IT!

Arleen Simonson
Keller Williams Elite
305-763-9696
0 votes Thank Flag Link Wed Mar 28, 2012
The asked question "right now' is not correct.
Renting is a short term, buying a long term
consideration.

Right now rents go up, and financements
are still very affordable, so RIGHT NOW:
===>>> BUY to own.

Also many other aspects have to be seen:
your financement capacity, your local commitments,
Condos or houses etc.

You need to have a trustworthy Realtor to discuss
your personal "case" in detail.

Call me if you want us to meet: 305 491 0492
Best to you
HANS
0 votes Thank Flag Link Wed Mar 28, 2012
Right here some information to answer your questionn
Miami, FL – The total number of listings, including single-family homes and condominiums, that pended in Miami-Dade County during the month of January increased 24.8 percent, from 2,746 in January 2011 to 3,426 in January 2012, according to the 26,000-member MIAMI Association of REALTORS and the local Multiple Listing Service (MLS) systems. In more detail, single-family home and condominium sales that pended during the month increased 46.4 percent and 13.6 percent respectively compared to the previous year. Compared to the previous month, total pended sales decreased 27.4 percent.
Cumulative Pending Sales
December cumulative pending home sales – including single-family homes and condominiums - in Miami-Dade County were 6.3 percent above what they were a year earlier, up from 11,182 to 11,887, and 5.4 percent higher than the previous month, up from 11,279.
“Pending sales, which typically predict future closing activity, continue to rise in Miami-Dade County,” said Martha Pomares, 2012 chairman of the board of the MIAMI Association of REALTORS. “After a record sales year in 2011, our inventory levels declined sharply. Current trends continue to reflect demand for Miami real estate.”
Pending sales of condominiums were 4.2 percent higher than they were a year earlier, up from 6,497, and five percent above what they were the previous month, up from 6,481. Pending sales of single-family homes were 9.2 percent above what they were a year earlier, up from 4,685 to 5,115, and seven percent above the previous month, when pending single-family homes sales totaled 4,798.


If you need to invest or maybe your second home or primary residence, right here a Realtor Beside You.
0 votes Thank Flag Link Wed Mar 28, 2012
Hello,

It is financially favorable still to buy rather than rent. As a matter of fact, rents are scarce and high right now.
So rents are higher and in demand. Those that lost their homes during the Housing Market crash are now renting. Therefore you will be paying high rental rates that could easily be less if you buy.

If you have a good credit history and have been in the same job for more than 2 years, then you should have no problems qualifying for a property.

Miami has now turned around and property values are starting to go up, so if you are in the market, don't wait too long to start looking.

Elsa Cristobal
Keller WIlliams Premier
305 793-8476
0 votes Thank Flag Link Wed Mar 28, 2012
Property owners are taking advantage of the market rising the prices, due to the amount of people lossing their properties an no having where to go other than rent, so at this moment it is worth it to buy. If you want answer to all of your question give us a call 305-456-2712
0 votes Thank Flag Link Wed Mar 28, 2012
You will have to do the math.
if the rent is 1500 a month and the purchase price for a similar unit is between 150K and 180K is better to buy.
But if for example you are paying rent for 1500 a month and the purchase price is 300K you will have to love the house.
the other scenario could be you are currently renting and you wants to change the old kitchen, or remove a wall from the inside, change color to live colors, and if the owner is not agree with all this changes you cannot make them. But if you own the house there one to tell what to do or not do it unless there is an association.
well the choice is your but this is the most common situation between owning a place compare to renting.

Carlos Escamilla
Realty World Executive
305-300-8814
0 votes Thank Flag Link Wed Mar 28, 2012
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