Buy, Don't Rent in Southwest Florida
By Katie Bassett
With home prices leveling, residents in Florida are faced with a major decision. Should you rent or buy in Southwest Florida? While the rent vs. buy debate continues to draw attention, it was found that buying a home is 37.7 percent cheaper than renting a home on a national scale.
Right now, an average U.S. home is listed to buy at $280,103 with a mortgage rate of 3.7 percent while it costs $1,769 per month to rent according to Trulia. Furthermore, mortgage rates would have to double in order to wipe out the financial advantage of buying a home, nationally.
But how do these numbers compare to the Southwest Florida housing market? Similar to the national trends, house hunters who plan on staying put for seven years or longer are better off buying than renting in the Sunshine State.
Cape Coral- Fort Myers
Famous for its palm tree-lined streets, both Fort Myers and Cape Coral are located on the southern Florida gulf coast. This area is not only popular for retirees, but it is also home to various baseball spring training camps. For residents renting in Cape Coral, target monthly rent prices average at $1500 per month and according to RentRage, the average rent for a single family home has spiked 23.6 percent in the past year.
Similarly, renters in Fort Myers will spend on average $1,650.00 per month. It costs an average of $218,664 to buy a home in the Cape Coral-Fort Myers area. The percentage cost of buying vs. renting in the area is -48.1 percent, indicating that buying costs are less than renting costs. Furthermore, is percentage is greater than the national comparison rate.
Punta Gorda is a small beach town due north of Cape Coral and is known for its laidback beach lifestyle and a plethora of recreational activities. Just slightly more expensive than Cape Coral and Fort Myers, renters in the area would spend $1,800.00 per month on average. A target home price in Punta Gorda averages $200,000.00 with a mortgage rate of 3.5 percent over a seven year period. Sectioned in with the North Port-Sarasota-Bradenton metropolitan area, the percentage cost of buying vs. renting in the area is -48.1 percent.
Bonita Springs sits just south of Cape Coral, but is still considered in the Cape Coral-Fort Myers Metropolitan area. However prices are slightly more expensive. Those renting in Bonita Springs will spend on average $2,500 per month on rent while the target home price is $270,000.00. For those living in their Bonita Springs home for seven years, the owner will have a 25% income tax rate and a 3.5 percent mortgage rate.
Naples is known for their vacation rentals and has proven to be touristy. However, there are many residents who enjoy the pristine white beaches when living in Naples. On average, a renter will spend $2,900.00 per month for a home in Naples. A buyer, on the other hand, can purchase a Naples home for $279,900, with a mortgage rate of 3.5 percent over a seven year period. While it is considered one of the more expensive areas in Southwest Florida, it still falls under the national average.
In total, it is roughly 48 percent cheaper to buy vs. rent in the majority of metropolitan areas in Southwest Florida, which greatly surpasses the national 37.7 percent. This alone should make the decision for a Florida resident. It is financially more responsibly to buy a home in the Southwest Florida region, and now is the best time to make the move.