When I first moved to Florida, I thought the cost for renting an apartment was extremely high compared to what I was used to in Indiana.
In the past 10 years, it's become even more expensive to rent in Florida. In fact, it's so expensive to rent, that I wouldn't even be able to rent my own house at the going rental rates. According to an article on the U. S. housing market, rising rents are motivating more Americans to buy homes. I'm not surprised.
Renting through the years
My first rent in the college town of Valparaiso, Indiana, was $260 a month. After a year, I moved to a rental home near the Indiana Dunes in Chesterton, Indiana. I paid $400. The highest rent I paid in Indiana was about $500 for a small home. When I moved to Florida, my rent went up to $780 a month. I looked up the apartment where I lived about 10 years ago in New Tampa, Florida. The rent is now $1,050.
Becoming a home owner
My first mortgage for my townhome was about $1,000 a month. Our mortgage now is about $1,200 a month. Zillow.com estimates the rent for my home to be about $1,350. I've seen similar properties renting for about $1,400 to $1,500. If our income decreased, we could easily refinance our home. According to calculations, we would have a mortgage of only $500 a month if we refinanced our home today. Staying in our current home and re-financing would cost us only one-third the cost of renting a similar home.
When my son told me recently he was saving up money to rent an apartment in Florida, I told him he'd be better off saving to buy a home with cash.
For those who can pay cash for a short sale or foreclosure in Florida, I don't think there is any rush to do it this year. Although interest rates will probably go up in another year, housing prices in Florida aren't likely to recover with so many foreclosures hitting the market here.
In Florida, it's still possible to buy a home for the cost of a car. Of course, for a nice house that isn't tainted with toxic Chinese drywall or mold, a home would go for the cost of about two cars.
Renting used to make sense, especially for single people who plan to move around. It's not that "investors" are all so greedy either. Some people purchased their home at the top of the housing bubble, and just want to make their mortgage payments without going into default.
It's a good thing we own a home, because I don't think we could afford to rent.
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