Ifyou are currently renting, one question you should ask yourself, “WouldI be better off buying?”. There are many considerations when makingthe rent vs buy decision, but the easiest and maybe most important is to figure out what is better for me financially.
In figuring out the financial benefit, the first factor to consider is rental and sales prices for a similar properties in your area and the monthly costs of each. To analyze this I drew up a scenario by selecting an actual 1440 square foot, three bedroom, two bath, two car garage home in Palm Bay, FL that recently rented for $1,150 per month. The house itself is valued at approximately $120,000.
Taking into consideration taxes and insurance and using the $15,000 available for down payment and closing costs for buyers who qualify for Florida’s Bond program, the mortgage payment of this home would be about $900 (remember it rented for $1,150 per month!). In fact, your mortgage will likely even be lower in the following year once you get your homestead in place, saving you substantially in property taxes.
Another significant consideration is with each mortgage payment you are also building equity (similar to an automatic savings plan). In your first year of ownership, with this scenario still in mind, about $1,775 goes towards equity. This amount increases every year. For example, in year five this amount increases to about $2,125 for the year.
With current market conditions and comparing house valuations to monthly rental rates, buying should put you way ahead financially in both the short and long terms. Using Florida’s First Bond program, the upfront costs to purchase your home aren’t much more than a rental deposit. Whereas, we can’t predict the future behavior of markets, owning in Brevard County is provably cheaper than renting and prices over time typically rise.
CalcXML has an excellent web site for calculating costs of renting versus buying. Please visit the following link to see whether you might benefit from buying:
Please don’t hesitate to contact me at firstname.lastname@example.org or 321-345-8833 to learn how I may help you figure out your best option.