SARASOTA, FLORIDA, February 7th, 2014 – Even if mortgage interest rates rise to 6% (which compare with the 5% level that Freddie Mac expects by the end of 2014), it would still be cheaper in the long run to buy rather than rent a home in the largest U.S. metro areas. This projection was based on a recent study by the online real estate marketplace Trulia which factored in the transaction costs of buying and renting, taxes, and opportunity costs. Its computation methodology takes into account the mortgage rate for a 30-year fixed-rate loan, the prospective buyer’s tax bracket, and the timeframe of the home ownership.
Using Trulia’s approach, buying a home would appear cheaper by 40% compared to renting a home in North Port-Bradenton-Sarasota. This estimate assumes that the home was purchased with a 30-year fixed-rate housing loan having a mortgage interest rate of 6%, the buyer itemizes tax deductions and falls under the 25% tax bracket, and intends to stay for seven years in the acquired residence.
A Texas-based homebuilder, LGI Homes, is in fact thriving in a business model revolving around turning renters into homeowners. This builder is focused mainly in southwestern U.S. and has two communities in the Orlando and Tampa areas. Its business thrust is the construction of affordable homes for entry level buyers at prices comparatively lower than current rental rates.
LGI’s Krenson Woods community in Lakeland provides a good basis for comparison of renting and home ownership. The builder, which is ranked 32nd largest nationwide and whose shares are publicly traded at NASDAQ, is offering four models at price points ranging from $799 to $959 per month. These homes are sited in oversized, landscaped lots and feature three to four bedrooms and incorporate energy-efficient appliances.
These LGI price points are indeed attractive when compared with the rates of institutional landlords like American Homes 4Rent. In Lakeland, the company is renting out a 1,860-square-foot home for $1,300 a month. Some of its lower-priced rentals are at Palm Bay where a 1,292-square-foot, three-bedroom residence is offered for rent at $1,000 a month.
Rental prices are approximately at the same level at Invitation Homes whose parent company, the Blackstone group, went on a Florida home buying spree this year for rental purposes. One of its lowest-priced listing currently is for a 1,404 square-foot, four-bedroom home which rent for $1,095 monthly.
Taking these rental rate levels into account, the Bradenton and Sarasota residential real estate market has many affordable purchase alternatives similar to LGI Homes’. Sarasota Bay Real Estate suggests though that prospective home buyers have to engage the services of brokers with a sound knowledge of the local market as such properties are currently among the fast-sellers. The most desirable listings don’t stay too long in the market, the full service realty firm notes.
The Pinecrest is one community in Bradenton where there are newly built homes competitively priced compared to long-term renting. Two residences in this neighborhood are currently listed in the MLS of Sarasota homes for sale at asking prices slightly under the mid-$100s. Their floor areas measure around 1,200 square feet and are designed with 3 bedrooms and 2 baths.
SARASOTA, FLORIDA, October 7, 2019 – Property values of communities in the Sarasota-Manatee region now face lesser threat from neighborhood eyesores brought about by abandoned, foreclosed homes. Known in the real estate trade as zombie foreclosures, these properties have shrunk significantly in the region. According to an August report of ATTOM Data Solutions, abandoned […] more>>