Category: Renting in Miami
Things you need to know if you are renting
Bank of America/USA Today Better Money Habits® Millennial Report, provides great insight into the financial concerns of the millennial generation. As the mother of three millennials, ages 21-25, and a Realtor I am always interested in what reports say drive this group of young adults.
Of great interest is the correlation between jobs and housing in areas where millennials like to live, which tend to be cities with plenty of cultural and social activities, strong public transportation, high percentage of others in their age group (18-34) and ethnic diversity.
According to the B of A study, “No matter where they live, the cost of living is a concern for a majority of millennials. More than half are also concerned about their ability to save based on where they live.” This is also one of my concerns for my children. My youngest is already thinking about where she is going to move once she graduates. Although she realizes it will depend where she finds a job in film editing, she is looking at cities that have both a large film/television production industry and a lower cost of living than some of the big cities, such as Los Angeles and New York.
Given the top Forbes’ Best Cities for Millennials in 2015, it is not surprising that cost of living is such a large concern. Eleven of the top 25 cities have rents at or close to $1300 per month. If you go by the rule of thumb that no more than 30% of your annual income should go to rent, then millennials in these cities would have to make a minimum of $52,000 per year. Miami rents have gone up significantly as well and though we didn’t make Forbes’ cut as top 25 cities, I think that is changing with the emergence of a strong tech entrepreneurial center.
Congratulations! You have purchased or rented your new home. Now is a busy time with moving, forwarding mail, and starting utilities but FPL has automated their connection and disconnection for electrical service to make connecting easier. Properties that have been unoccupied might not have service when you move in, so be sure to get it connected before your moving day.
You can start your service online at www.FPL.com/startservice or by calling 1-800-226-3545. For same day service, you must call before 2:oo p.m. Before having the service connected, turn off inside breakers, electronics, and appliances, and remove items that are on the stove.
When you sell your property or terminate your lease, empty, open and unplug the refrigerator and call or log on to disconnect the service so you do not incur charges .
Learn more online:
If you are a landlord, consider joining FPL’s Automatic Connect program to ensure you have power when you
need it in the properties you manage. Visit
http://www.fpl.com/customer/autoconnect.shtml.
Sorry, I had to remove the video because the unit rented in one day!
This question has been asked forever and most answers are it depends on how long you plan on living in a home and what your lifestyle is like. If you plan on living in a home for more than 3 years – 5 years, experts say that it is probably more economical to buy. Given the recent decline of property values, especially for those purchased during the most recent boom, I was surprised to see that the Costco January Debate: Is renting a home better than buying? resulted in only 26% of respondents saying it is better to rent. 74% believed buying was better.
With rental rates in Miami on a steep incline over the last two years, I would have to agree. Especially if you are planning on making Miami your home for a while.
During a Sunday get together, the rent vs buy question came up and a lively discussion ensued. The individuals who were pro-renting argued that renting provided:
- cash flow/opportunity cost: not having money tied up in a mortgage, taxes, and insurance, allowed more money for investing, travelling, miscellaneous purchases
- flexibility: if they wanted to move into different neighborhood, change size , or relocate for a job, their choice is not dependent on first having to sell their home
- better lifestyle: they argued that they could rent a nicer place in a nicer area than they could afford to purchase
- maintenance-free living: don’t have to worry about repairs, yard work, pool cleaning
The pro-buyers argued that buying was better because:
- it builds equity: which helps build your net worth. It is basically a forced way of saving money.
- tax benefits: interest on a mortgage is currently tax deductible, thereby reducing taxes you owe
- gives you control over finances: you are not subjected to rental increases
- stability: since home ownership is fairly long term, owning a home creates a sense of security and community
- maintenance: don’t have to wait for landlord to change or repair something. Have control over quality of work of repairs and type of work done (i.e wood floors vs changing carpet)
Obviously both renting and buying have their pros and cons. The New York Times rent vs buy analysis says that overall, if you stay in a place for 5 years or more, you are better off financially buying. This analysis assumes that the landlord pays utilities, which for the most part in Miami-Dade is not the case. The tenant usually pays all utilities, except for those that are provided by, and included in, the condominium’s maintenance fee.
So what side of the fence are you on and why?
Rents are tight in most markets and, due to the numbers of foreclosures, short sales, and number of people who have lost their jobs or have had their work hours decreased, the trend is expected to continue at least for the short term. However, Jim Woodard predicts this is a temporary trend.
If you are a renter, you may want to consider the affordability index in the city you live and work in and calculate the cost of renting vs. buying. If you are a landlord, you may want to look at Money Magazine’s Best Cities to Be a Landlord list
With the increasing popularity of living in walkable communities, rents are on the rise in areas such as downtown Brickell and Coral Gables. The fact that there are so many new buildings with great amenities and upgraded finishes, such as granite counter tops and modern kitchens and baths, in these two areas have lead to an increase in demand and rents. An unfurnished 2 bedroom 2 bath condo in a newer building starts at $2000.
According to Trulia’s Q1 Rent vs Buy Index, Miami is #1 on the Top Ten Cities To Buy vs Rent table. The reason I titled my post “ It May Be Cheaper To Buy Than To Rent” instead of “It Is Cheaper To Buy Than To Rent” is because Trulia arrived at their conclusion by comparing two-bedroom apartments, condominiums and townhomes, currently listed on their website. If you want to find out if you are better off buying or renting, use their rent calculator and fill it in with your own rental costs and home specifications.
Obviously is more to consider than simply the cost when you decide whether to rent or own, but knowing your costs is probably one of the largest factors.
