Is it Smart to Rent Before Owning in Miami?November 30, 2016
Making the decision to rent in Miami before you buy isn’t exactly cut and dry. One isn’t better than the other and it really depends on your situation, your budget and your goals. In some cases, buying a home is the right decision, but in other cases, it makes sense to rent first. Here are a few situations and the answer to this question for each.
The Vacation Home in Miami
If you’ve never been to Miami, it may be smart to rent before you buy a vacation home. However, if you’ve visited Miami multiple times and you know you want to make this the city you visit for vacation, you probably don’t need to rent.
Renting a home for vacation is expensive in Miami. However, when you own a vacation home, you can rent it out to others when you’re not using it. As long as you know you want to vacation in Miami, there’s no need to rent before you buy in this situation.
Moving for a New Job in Miami
When your company decides to move you to Miami or you get a new job offer, you may want to rent before you buy. First, you are going through a big transition with a new job. Second, you don’t know Miami yet. Finally, renting for a few months will ensure the job will last before you buy.
You don’t want to buy just to turn around and sell a year later. You want to make sure you’ll be sticking around. Renting for a few months or even the first year when moving to Miami for a new job makes sense in most situations.
However, if you have children going to school, you may struggle to find a rental in the right area for the right schools. When this is the case, buying makes the most sense. Just make sure you take the time to choose the right home and neighborhood for the long term.
Budget Doesn’t Support Buying Yet
Even with the right deal in front of you, it’s not smart to buy if your budget won’t support it. Maybe you can wait a year and have a larger down payment, which will allow for a lower mortgage payment. Maybe the mortgage payment pushes your budget to the very edge of the acceptable debt-to-income ratio. If this is the case, rent for another year or two, save your money and buy later when your budget will support it.
Living in Miami Part Time
Maybe you travel to Miami regularly and it would make sense to have a condo or home in the city. If you plan to live in Miami part time, buying makes the most sense. It can get expensive to rent a home buy the week or month with a short-term lease. Staying in a hotel is also very expensive.
In addition, when you rent, you don’t get anything back for the money you spend. If you plan to live in Miami part time due to travel, vacationing or any other reason, buying makes the most sense.
Moving from Another Country
If you’re moving from outside the United States and you want to establish residency, there are certain steps you will need to follow. One of the easiest ways to become a resident is to purchase a property for $500K or more. This makes the process much easier.
Even though purchasing is a part of the process, renting first could make sense. You want to rent when you visit the city before you decide to live in Miami. However, once you decide you want to live here, you need to buy to help with the residency process.
Snowbird from the North
Snowbirds often have to make the decision to rent or buy. However, the decision is pretty cut and dry since renting for just 6 months is very expensive and not always possible. Most landlords want yearly leases and will charge more for rent on a month-to-month basis.
However, if you buy in Miami, you not only get to visit whenever you want, but you also have an investment. If you find that you didn’t save enough for retirement, the home becomes a protection, as you can sell it or cash in the equity to help out.
Related: Renting vs. Buying
The debate to buy or rent in Miami depends on your situation. In some cases, renting first makes sense, while in other situations, buying is the right choice to make.