When does it make sense to rent vs own in Florida?

[Arcenal813]

Originally Posted by MortonR

I am leaving Florida for good next week. Why? Because the cost of living here has gotten out of control. I’ll be retiring in the near future and while income won’t be an issue, I don’t want to live where long term costs are so unpredictable, not to mention the weather. Of course, everyone says the next one will be the “Big One”, but I’ve been here for almost 30 years and a lot of storms, and there’s no question in my mind that they have been getting worse. I truly believe that there will be a major hurricane like the one that hit Ft. Myers a couple years ago. I’m prepared with hurricane shutters and a whole-house generator set with a 1,000 gallon LP tank that could run my house for at least 7-10 days. Nice to know, but to be honest, who wants to be around after a storm of that magnitude?

I have a good friend who owned a nice Craftsman bungalow near downtown Seattle. He recently left the area, mainly due to the vagrants that hung around his neighborhood, one who moved into his garden shed! Law enforcement wouldn’t do a thing, he had to threaten the guy with bodily harm to get him off the property.

I totally understand your medical situation, but I can’t imagine it would be so bad that you would consider coming here. I know the PNW, Seattle and Portland, and while I know things have gone downhill there over the last decade or so, I can’t imagine the costs being lower, except for maybe real estate. Insurance alone, both car and homeowner’s, will eat you alive.

Good luck!

RM

A lot of what you've said, in this thread and others, is also why I choose to rent vs own. I know that I will not remain here long-term, unless things take a drastic turn. If I'm going to be paying as much as it costs to be in nice areas here, I would rather be up in the Northeast.

[silverct9a]

The problem with this logic is that where could one escape natural disasters?
Midwest = Tornadoes
West Coast = Earthquakes
North = Blizzards

Now COL on the other hand, I get it, that’s a real concern.

Originally Posted by MortonR

not to mention the weather. Of course, everyone says the next one will be the “Big One”, but I’ve been here for almost 30 years and a lot of storms, and there’s no question in my mind that they have been getting worse. I truly believe that there will be a major hurricane like the one that hit Ft. Myers a couple years ago. I’m prepared with hurricane shutters and a whole-house generator set with a 1,000 gallon LP tank that could run my house for at least 7-10 days. Nice to know, but to be honest, who wants to be around after a storm of that magnitude?

RM

[City Guy997S]

Originally Posted by blueskies2023

actually, I have. Take 200,000 in cash, place it safe in market, plenty of great returns safe at 8 or 9%. Make $$$$$. Rent example, $2k a month. Own, aside from mortgage or cash payment, hoa is ??? Property tax is ???? , insurance property is ????. Most of us are near $2k in hoa plus tax, plus insurance alone.

Ok awesome, you make 8% (taxable) and make 16K a yr

What happens if the market continues surging and that 200K house is worth 260 the next year then 300 the year after? Still feel good about your 16K a yr taxable gain? If you unload the house and get to keep even 75K tax free after two years it seems like a win.

[City Guy997S]

Originally Posted by StuartM1

A couple sources of info below. When you really look into the unrecoverable costs of buying vs renting, even with conservative estimated inputs, it's surprising how much less expensive renting can be vs buying.

*

https://www.youtube.com/watch?v=Uwl3-jBNEd4

https://www.calculator.net/rent-vs-buy-calculator.html

Ok he is a financial planner, so of course his fantasy is to steal you away from the realtors and get you to invest with him......easy bias to see.


1. My first question to him: do you own a home?
2. Keep in mind also that the insurance industry does the same pitch, "buy term and invest the rest" when trying to get someone to buy term insurance and come out ahead "IF" the money is invested and it gets favorable returns. The glitch is certainly in the latter part of that equation.
3. Most people are poor savers/investors. If they buy a home it makes them more stable and at the end of the mortgage they own the home. Renters never get to cross that finish line and are at the mercy of their landlord. Moving is unrecoverable costs: If a renter is moving every 3-5 years vs. a guy that buys a house and stays 15-20 years then I'd bet the moving costs get to be pretty considerable.


Best gauge of the wisdom: How many financial planners own their own homes vs renting? How many truly rich individuals do you know that are long term renters?

This is friend of mine's home, his is a financial planner:

Total Market Value $12,617,409 $9,639,634 $6,818,910 $6,697,096

House has almost doubled in value in the last 4 years. Yes the tax bill is 111k a year so he has blown 444K in sunk money. It is financed with a 3% mortgage and he wakes up looking at the ocean every morning.
So if its jumped 5.9mm in value, even if he lost 444K in taxes and another 450 in interest/insurance whatever. He is 5mm ahead AFTER paying those sunk costs.

Zillow says: Zestimate®: $14,851,800 which is even a stronger return.

[blueskies2023]

Originally Posted by City Guy997S

Ok awesome, you make 8% (taxable) and make 16K a yr

What happens if the market continues surging and that 200K house is worth 260 the next year then 300 the year after? Still feel good about your 16K a yr taxable gain? If you unload the house and get to keep even 75K tax free after two years it seems like a win.

You're right. But in this very very uncertain real estate times, I'm not so sure the place would go to 260 and may even drop to under 200. With the ever increasing, no end in site homeowners insurance and property taxes, I can't see this as sustainable.

[City Guy997S]

Originally Posted by blueskies2023

You're right. But in this very very uncertain real estate times, I'm not so sure the place would go to 260 and may even drop to under 200. With the ever increasing, no end in site homeowners insurance and property taxes, I can't see this as sustainable.

I bought a brand new house last year in a very hot zip code. My insurance dropped $700 from last years policy and the house is up atleast 350K over my purchase price. The tax bill last year was on the dirt only ($5600) and I suspect this year it will be triple that even with my portability brought over. I have a 10 year warranty on the roof, appliances and a/c units (from the manufacturers, not the builder).

I've got about a 25% mortgage (25% of the value of the house and that was on the day I bought it, not todays value). If the market dumped 30% I wouldn't lose an ounce of sleep.

[LKJ1988]

Originally Posted by MortonR

I am leaving Florida for good next week. Why? Because the cost of living here has gotten out of control. I’ll be retiring in the near future and while income won’t be an issue, I don’t want to live where long term costs are so unpredictable, not to mention the weather. Of course, everyone says the next one will be the “Big One”, but I’ve been here for almost 30 years and a lot of storms, and there’s no question in my mind that they have been getting worse. I truly believe that there will be a major hurricane like the one that hit Ft. Myers a couple years ago. I’m prepared with hurricane shutters and a whole-house generator set with a 1,000 gallon LP tank that could run my house for at least 7-10 days. Nice to know, but to be honest, who wants to be around after a storm of that magnitude?

I have a good friend who owned a nice Craftsman bungalow near downtown Seattle. He recently left the area, mainly due to the vagrants that hung around his neighborhood, one who moved into his garden shed! Law enforcement wouldn’t do a thing, he had to threaten the guy with bodily harm to get him off the property.

I totally understand your medical situation, but I can’t imagine it would be so bad that you would consider coming here. I know the PNW, Seattle and Portland, and while I know things have gone downhill there over the last decade or so, I can’t imagine the costs being lower, except for maybe real estate. Insurance alone, both car and homeowner’s, will eat you alive.

Good luck!

RM

Less than 18 years to go before Tampa gets it number pulled for CAT5 with gust over 220mph.

[Dave_n_Tenn]

A simple bench mark. Look at the county value of a home... you can find that on the tax collectors web site. If the house rents for less then 1/2 % of the home 'market value' it's a good deal. Enter the address and you can find the taxable market value. Lets say the home is 600k "market value" on the tax collectors web site. 1/2 of 1% would be $3000 a month. If you could rent it for less... that's a good rental value. Keep in mind a rental property isn't homesteaded so the owner pays full property tax.

So now you want to buy the home. Probably the market value is low, because it usually is. lets say it sells for 700K. You will pay property tax on 700K, less your homestead exemption of 50K. Your taxes will be $6200+ a year. The millage rate is .97 for every thousand of accessed value. That's $500 a month. Insurance? maybe 6-8K so that's another $ 500-700 a month. Mortgage? Then it becomes a issue of how long you plan on living there, to see if it's worth it. When it's all said and done you shell out $1500 a month just to own it, not to live in it.

I'm all about home ownership and I've been living in Florida since the 70's, but the way the market is right now, 10 years or less... rent. 10 or more buy.

[City Guy997S]

Originally Posted by Dave_n_Tenn

A simple bench mark. Look at the county value of a home... you can find that on the tax collectors web site. If the house rents for less then 1/2 % of the home 'market value' it's a good deal. Enter the address and you can find the taxable market value. Lets say the home is 600k "market value" on the tax collectors web site. 1/2 of 1% would be $3000 a month. If you could rent it for less... that's a good rental value. Keep in mind a rental property isn't homesteaded so the owner pays full property tax.

So now you want to buy the home. Probably the market value is low, because it usually is. lets say it sells for 700K. You will pay property tax on 700K, less your homestead exemption of 50K. Your taxes will be $6200+ a year. The millage rate is .97 for every thousand of accessed value. That's $500 a month. Insurance? maybe 6-8K so that's another $ 500-700 a month. Mortgage? Then it becomes a issue of how long you plan on living there, to see if it's worth it. When it's all said and done you shell out $1500 a month just to own it, not to live in it.

I'm all about home ownership and I've been living in Florida since the 70's, but the way the market is right now, 10 years or less... rent. 10 or more buy.

Good and bad info here.

If you can rent for 1% in most S Florida markets that is reasonable. I can't think of anywhere I can rent a 600K house for 3K month.

Randomly picked Coral Springs- new listings
https://www.realtor.com/rentals/deta...5_M50011-20613
$3600 month? assessed for 516K Tax bill will be 11K or more this year.

Year Land Building /
Improvement Just / Market
Value Assessed /
SOH Value Tax
2024 $45,000 $471,250 $516,250 $486,180
2023 $45,000 $432,210 $477,210 $441,990 $10,408.82
2022 $45,000 $388,480 $433,480 $401,810 $9,369.83


I have a relative that rented 10 years thinking the market will definitely slow........well $400,000 in rent money spent and the market surged. Guessed wrong and spent MORE money at a higher interest rate to finally buy. Professional job, very stable income, rented a nice waterfront condo and lives in a not as nice townhouse with water views only when it rains!

[MortonR]

Originally Posted by silverct9a

The problem with this logic is that where could one escape natural disasters?
Midwest = Tornadoes
West Coast = Earthquakes
North = Blizzards

Now COL on the other hand, I get it, that’s a real concern.

Easy. My other home is in northern AZ. No earthquakes, worst thing is snow (about 100”/year) and the occasional hailstorm in the summer.

No major weather events there, certainly nothing as destructive as a hurricane or earthquake.

Nowhere is immune to bad events, but you have some control over where you go, and it’s not difficult to find places with lower risks.

RM