Florida Condo: Rent vs Buy?

[Rich]

Rich. What number are you using for appreciation? Take Sarasota, Fl for example. The city as a whole experienced 11.25% annual average appreciation over the last 18 years. That includes the last couple of years that have not been so good. Obviously a better NBHD will beat that, but even $11,250 gain each year goes a long way against $20K down on a $100,000 property. If you rented when not in use using a property manager you'd be even better. Would definitely like to see your figures that would support renting over owning.

Honobob:

I'd be pleased to send you my Excel spreadsheet. If you have an email address attached to you on this site I'll check it out and send it along. If not, not sure how to do that.

Rich

 

[Zoocat]

I put the numbers (own vs. rent) on a spreadsheet and they come up with renting every time. Indeed, if you rented a place for twelve months out of the year the numbers still show rent wins over owning.

One reason this is so is that most folks don’t take into consideration the cost of the money used to purchase the unit. If you buy a $100,000 dollar condo outright, that money would earn around $3,000 dollars a year (at 3%) even in today’s soft interest rate environment. Then there are the property taxes (high in Florida) and high insurance rates. Also, you might well face unanticipated assessments for repairs at your facility, which can be quite steep.

Anyway, that’s how it looks to me.

Rich

The opportunity cost of the investment of the lost investment at 3% is important but also important is the cost of renting a similar housing unit. In my town the rents for identical units are the same as what I'm paying for mortgage, taxes, insurance and HOA fees. In addition rents increase (as do HOA fees and insurance). I'm sure you thought of this, Rich, but I thought I'd include it .

Also, for most of us, the quality of life issues are important. Being a tenant and at the mercy of a landlord (especially a pain in the ass one who lies and won't fix things) has got to be one of the most annoying situations of life.

 

[Gearhead Jim]

I'm going to make a guess and say that real estate appreciation will cover the opportunity cost of the money used for a vaction home/condo, if you don't need to sell for at least 5 years.
That doesn't change the fact that for those of us who spend only a couple of months there, renting looks cheaper and less hassle than buying.

 

[Kelly]

I put the numbers (own vs. rent) on a spreadsheet and they come up with renting every time. Indeed, if you rented a place for twelve months out of the year the numbers still show rent wins over owning.

One reason this is so is that most folks don’t take into consideration the cost of the money used to purchase the unit. If you buy a $100,000 dollar condo outright, that money would earn around $3,000 dollars a year (at 3%) even in today’s soft interest rate environment. Then there are the property taxes (high in Florida) and high insurance rates. Also, you might well face unanticipated assessments for repairs at your facility, which can be quite steep.

Anyway, that’s how it looks to me.

Rich

Thanks Rich,

I would love to get a copy of your spreadsheet. Being from Canada, I'm sure it will help immensly with understanding the costs of Condo ownership in Florida.

 

[In-control]

I put the numbers (own vs. rent) on a spreadsheet and they come up with renting every time. Indeed, if you rented a place for twelve months out of the year the numbers still show rent wins over owning.

One reason this is so is that most folks don’t take into consideration the cost of the money used to purchase the unit. If you buy a $100,000 dollar condo outright, that money would earn around $3,000 dollars a year (at 3%) even in today’s soft interest rate environment. Then there are the property taxes (high in Florida) and high insurance rates. Also, you might well face unanticipated assessments for repairs at your facility, which can be quite steep.

Anyway, that’s how it looks to me.

Rich

Ditto - I did the same thing and came up with the same conclusion. I would rather own one good house and then rent for 3-6 months anywhere that I want - feedom is a wonderful thing!