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

[Sunshine Rules]

I've been here in FL (Sarasota area) for 40 years now, have gone thru a number of major tropical storms and a few hurricanes with little or no damage.

My in-laws bought a winter home in FL back in 1968 and although they are gone now, the home they owned for decades is still standing in spite of all the storms.

I've both rented and owned over the years. My reasons for buying vs renting?

We were tired of dealing with landlords, leases, deposits & having a landlord tell us what we can and cannot do with our home, including adopting a couple of pets.

We wanted the security of having a homesteaded property, one that by FL law is protected in bankruptcy from creditors. A judgment creditor cannot force the sale of a FL debtor’s homestead to satisfy a money judgment. A recorded judgment does not attach to or become a lien on a FL debtor’s homestead property.

We wanted the security of putting down roots, living in the same neighborhood for years and years, knowing our neighbors, knowing that if we moved it was our decision and not because a landlord gave notice.

A number of posters on this thread have made good arguments for both renting and buying. There's no one right or wrong answer. It comes down to the financial and emotional needs of the individual.

[Chas863]

Originally Posted by Sunshine Rules

I've been here in FL (Sarasota area) for 40 years now, have gone thru a number of major tropical storms and a few hurricanes with little or no damage.

My in-laws bought a winter home in FL back in 1968 and although they are gone now, the home they owned for decades is still standing in spite of all the storms.

I've both rented and owned over the years. My reasons for buying vs renting?

We were tired of dealing with landlords, leases, deposits & having a landlord tell us what we can and cannot do with our home, including adopting a couple of pets.

We wanted the security of having a homesteaded property, one that by FL law is protected in bankruptcy from creditors. A judgment creditor cannot force the sale of a FL debtor’s homestead to satisfy a money judgment. A recorded judgment does not attach to or become a lien on a FL debtor’s homestead property.

We wanted the security of putting down roots, living in the same neighborhood for years and years, knowing our neighbors, knowing that if we moved it was our decision and not because a landlord gave notice.

A number of posters on this thread have made good arguments for both renting and buying. There's no one right or wrong answer. It comes down to the financial and emotional needs of the individual.

Good post.

As a friend of mine said long ago, "If you own a home and decide that you want to dig a hole in the yard, all you need is a shovel."

Of course, today, I might have to modify that saying just a bit by adding "You may also need a permit from your municipality and/or your HOA before digging the hole."

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[CLEOPATRAZEUS]

So true. Been in Florida for 32 years .Bought a house that needed work (fixed it up nicely over the years)so we could have a yard for the kids and pets. We are retired now and when we look at townhouses,patio homes etc in some 55 and over communities so we can do less house repairs etc and read about HOA'S (which we never experienced) we are not sure we could confirm. Our kids told us we would not. LOL We still have pets and sharing a common wall would be a concern. We grew up being told that getting a house was first before vacations,new cars etc. So we bought a starter home in Chicago suburbs in the late seventies.Our kids played on front yards with other kids. Or in the back yards where they didnt need constant supervision. Our dogs were not walked on leashes, They ran in the back yards. We didnt have to like all our neighbors but everyone still got along. I feel sorry for young families in todays world that may not be high wage earners and can not afford a starter home. Prices are so out of reach. We will really miss our neighborhood if we move but sometimes its time for a new adventure or a need to downsize.

[silverct9a]

I disagreed with your entire post until I read to the bolded portion. After reading it, I totally agree with you that most of real estate value is tied to the desirability of its location and SoCal and SoFlo are highly desirable. Personally, my primary, new construction home in Palm Beach County nearly tripled (based on appraisal) in value at its peak in mid 2023.

But to play devil's advocate, I still consider owning (in most cases) to be better than renting and the pros generally outweigh the cons.

Below are some quick bullet points:

1). The argument that homes aren't an investment and that's its an expense seems silly considering that we all have to pay for a place to live. At least with owning, the principal payments eventually end, and I build equity - What does a renter get besides paying off a landlord's mortgage, taxes, and insurance while said landlord profits?

2). House ownership is incentivized with deductible interest and an exemption on capital gains up to a certain amount when sold.

3). Property that could be left to offspring (generational money).

4). That property could be leveraged to buy other investments.

5). That property would reduce your tax burden.

6). People who own property are more likely to survive economic uncertainty because they have equity in their property. You lose your job but have $200k in your house, you can refi or do a HELOC and you'll be in a better position than a renter.

7). Mortgages generally qualify to get some type of deferment during economic hardship - Renters do not...miss a month's rent and you'll be living under a bridge the following month.

Not directed towards you per say, but whenever someone tells me renting is better than owning outside of extreme examples, I quickly become suspicious of said person's intentions.

Originally Posted by dtcbnd03

In 99% of America renting is ALWAYS better than buying. A primary residence is not an investment...it's an expense. Closing costs, maintenance, renovation, taxes, insurance, etc...you're shelling out money each and every month. If you buy the SP500 you roughly double your money every 10 years without lifting a finger or spending another dime. With a house you MIGHT double your money but after adjusting for all the time/costs that home owners conveniently leave out you don't. 5x leverage and a 3% mortgage rate would definitely change that equation cause that's basically free money....but not at 7% rates today.

Now the exceptions to this rule are Southern California...and I believe soon South Florida. These are the only two places in America where you can get year round nice weather, sun, beach, ocean so demand will easily outpace supply and inflation. Location. Location. Location. There's a reason why a homes in LA / San Diego sells for millions....and why ones in Tampa and Miami will soon follow (if they haven't already). But hurricanes and insurance situation sure have me nervous here in SOFL.

I own several investment properties but still rent. The ONLY reason I would buy a primary home is for an investment in my family...and not for financial investment reasons.

[dtcbnd03]

Even Warren Buffett says buying a house is a lousy financial investment...

https://finance.yahoo.com/news/warre...184515477.html

My favorite example from Buffett of how lousy non-income producing assets are as financial investments is the Mona Lisa. Now just stop and think if your house is going to appreciate more in value than the Mona Lisa...

https://markets.businessinsider.com/...demnity-2021-9

[Dave_n_Tenn]

Originally Posted by dtcbnd03

Even Warren Buffett says buying a house is a lousy financial investment...

https://finance.yahoo.com/news/warre...184515477.html

My favorite example from Buffett of how lousy non-income producing assets are as financial investments is the Mona Lisa. Now just stop and think if your house is going to appreciate more in value than the Mona Lisa...

https://markets.businessinsider.com/...demnity-2021-9

Not every investment falls into income producing. The fact that you and I are alive and breathing alludes to that fact... right? My parents invested in me, their time, energy, love and great expense on their part. I'm glad they did.

I contend a home is different from a house. To me... it's not semantics and my 'best' investment.

[Chas863]

Originally Posted by dtcbnd03

Even Warren Buffett says buying a house is a lousy financial investment...

https://finance.yahoo.com/news/warre...184515477.html

My favorite example from Buffett of how lousy non-income producing assets are as financial investments is the Mona Lisa. Now just stop and think if your house is going to appreciate more in value than the Mona Lisa...

https://markets.businessinsider.com/...demnity-2021-9

It's odd that you would use Warren Buffet as an example for NOT owning the house that you live in since he has owned and lived in the same house in Omaha for about 60 years. Wonder why he's not renting if he truly believes that?

https://homeimprovementgeek.com/warren-buffett-house/


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[dtcbnd03]

I was clear to state "financial" investment in my posts. I agree homes are great emotional and family investments but not financial ones.

And Warren Buffett only bought a house because his wife wanted him to which he mentions in the article. He delayed his house purchase as long as possible so he could use that same down payment money to buy stocks which earned him a much greater financial return.

[Chas863]

Originally Posted by dtcbnd03

I was clear to state "financial" investment in my posts. I agree homes are great emotional and family investments but not financial ones.

And Warren Buffett only bought a house because his wife wanted him to which he mentions in the article. He delayed his house purchase as long as possible so he could use that same down payment money to buy stocks which earned him a much greater financial return.

I would have to see some real numbers in order to be convinced of what you are saying. Also, it could depend on the specific area since NOT ALL areas appreciate at the same rate. Some even depreciate for a decade or several.

So, I'm not saying that you're wrong. It's just that I'm not convinced that you're right either since any particular area/location/price/assumptions would have a heavy influence on the outcome of the calculations.

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[Dave_n_Tenn]

Originally Posted by dtcbnd03

I was clear to state "financial" investment in my posts. I agree homes are great emotional and family investments but not financial ones.

And Warren Buffett only bought a house because his wife wanted him to which he mentions in the article. He delayed his house purchase as long as possible so he could use that same down payment money to buy stocks which earned him a much greater financial return.

Do you believe this is universally true? or just a one off example of how people can use their personal wealth and energy and how it should be invested?