Yes, surprisingly enough, Miami. Why is that? Well, rents have gone through the roof so much that a mortgage for similar property is less than rent. I recently came across an article that stated that Miami was one of the 10 biggest cities in the US that it costs less to rent than buy. According to the statistic, the average monthly rent was $1722 while the average monthly mortgage payment was $1013. The Average home price was $249,952 with a break even figure of 4 years. [Source]
Now, that's not to say that some high-rise luxury condominiums are going to be in this average amount. But this takes figures from all different communities surrounding the Miami-Dade area and Miami Beach. I and condominiums are still to be well over $500,000 or more making a mortgage payment of at least $2500. Rent for similar properties may actually be more however. So the average across the board states that for the same or similar type of property would cost less to have a mortgage then rent the property. However, these figures are not taking into account homeowners association fees, closing costs and down payments. Some HOA fees can run hundreds of dollars a month adding quite a chunk to your monthly housing payment.
There are pockets of Miami that are growing faster than others such as the waterfront, downtown, Brickell and Coral Gables. But, these are primarily high-rise apartments and condominiums. Once all is said and done and the new waterfront is designed will the figures be similar? I spoke to a couple just this last week that were on the fence about continuing to rent or buy. Since the market is turned around and prices are increasing and so are interest rates, I urge them to buy at this point. If they plan on hanging onto the condominium for at least 4 to 5 years they can almost assuredly expect an increase in value and appreciation. Currently they were paying about $2000 a month for rent for small single-family house in the Coral Way neighborhood and they were looking for a condominium in Coconut Grove or Coral Gables. They were able to find a very similarly sized home for about $1800, which did not include $300 a month in homeowners association fees. This is only $100 more than they were paying in housing costs previously and they didn't have the responsibilities or maintenance of a single-family house.
There certainly are benefits to buying over renting but the opposite has its benefits as well. The compromise or combination of the two is buying a condominium were all the external and exterior components are taken care of by the homeowners association. Of course, you do of the downside of paying additional for that but many condominium buildings throughout the Miami area have a lot of additional amenities including swimming pools, tennis courts and fitness centers. There are pros and cons to each and you have to decide if you're planning on staying in the home for a while or looking at the low maintenance and low responsibilities of renting.
Regardless of which direction you plan on going give me a call today and we can discuss the numbers, find out what is a good budget for your finances and find out exactly how much you would be paying in a mortgage over renting.
Read More: 10 years of Miami Real Estate Performance