Renting vs Buying – What’s a person to do???

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To rent or buy, that is the question! Or better yet, to sell or rent out?

For those of you who are weighing the pros and cons of selling your home versus moving and keeping the property as a rental, I hope this will shed some light. As a realtor, of course my job is to help people buy and sell homes. Sometimes “now is the time” is the best advice and other times it’s not and I really value honesty when discussing this choice with potential clients. Having said that, if you are a person who currently rents and you’re thinking of buying, don’t wait another minute!

Median rental rate in Sarasota County have increased by 16% from May 2015 to May 2016, while median home sale price has only increased 10%. At the median rates, in 2016 owners are saving about $501 per month, which adds up to $6012 over the course of the year – crazy right?!? This savings increased by a whopping 47% from $341/month in 2015, as mortgage rates stayed low and rental rates continued to rise.

For owners who are deciding whether to sell or rent there isn’t necessarily a blanket rule (since if you bought more than a year ago you are likely up significantly already anyway and it may or may not make sense in your life to hold onto a rental property), but with the increase in inventory over the past few months and leveling out of sale prices, it is worth considering both options. If this is a situation you are weighing and you would like help, please get in touch with me and we can evaluate the specifics of your situation so you can make the best decision.

So kids, the moral of this story is that the place to be right now if it is possible for you is homeowner or landlord, not a tenant! If you are thinking of making the leap and need a lender’s opinion, I have some who are wonderful and can help!

Here is how the numbers break down:

 

2016

2015

 
Median Home Sale Price

$248,000

$225,000

Median Cost to Rent

$1798

$1550

Median Cost to Own

$1297

$1209

Monthly Owner Advantage

$501

$341

Annual Owner Advantage

$6012

$4092

 

All information here is gathered from MLS data. Rental rate listed is median for properties leased on an annual basis in the month of May in Sarasota County, and the mortgage rate takes the following into consideration: loan amount is figured with a 20% down conventional loan at 4% from the median sale price for the month of May in Sarasota County, then $200 per month for taxes and $150 per month for insurance is added to obtain the monthly total.

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