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.
Beachfront Realty, Inc.