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Renting vs Buying a home in Palm Beach County (South Florida)

At some point in your life, I am sure you have wrestled with this question. Should I buy or should I rent? It’s not an easy question to answer since obviously both options have their advantages and disadvantages. A lot of it depends on your lifestyle, location, and real estate market. Many articles have been written on general pros and cons of buying vs renting so for this post I wanted to mostly focus on how local real estate markets might affect your decision.

Before I get into breaking down the popular local communities let me go over the most common benefits for each (buying vs renting). 

Benefits of owning a home:

  • Great investment – homes usually increase in value.
  • You own it, you can pass it to your children.
  • Freedom to remodel the home
  • As long as you pay on time, it builds your credit.
  • More predictable monthly cost.
  • Usually no restrictions on Pets.

Benefits of renting a home:

  • Lower monthly payments
  • Short term commitments (usually 1yr vs 30yr for a mortgage)
  • Don’t need to worry about repairs ( Landlord responsibility)
  • No property taxes

Now that we have gone over the basics let’s dive into some popular PBC communities.

I am going to go over two metrics that can be used to help with your buy vs rent decision.

 

  • Price to Rent Ratio
    This is a pretty simple but popular metric that compares the difference between renting vs buying. We look at local communities and their existing ratios
    Here is a good explanation of how it works
  • Property Tax Rate
    Paying a huge amount of tax every year on your property can put a significant dent on your wallet so sometimes that can be a determining factor in your decision making. We look at local communities and their property tax rates.

Rent vs Buy in Wellington, FL

Wellington is a great community in the western part of Palm Beach county with a population of about 62,000 where 76% of that population are homeowners and the unemployment rate is at low 2.4%. You can find out more about wellington here.

Price to Rent ratio

The Median Monthly Rent rate is at around $2,020 a month ($24,240 annually).

Median home value is at $399K

This gives Wellington price-to-rent ratio (home value/annual rent) of 16.4

This is within the lower range of the ratio and from a purely financial perspective, you should be leaning more towards buying a home in wellington. Generally, anything below the ratio of 20 is within the BUY signal.

Tax Rate

Wellington’s current property tax rate is at $12.61 (per $1,000 of home value)  which is above average for Palm Beach County: $11.18.
This is still considered relatively close to the PBC average so it probably shouldn’t sway the decision one way or another.

 

Rent vs Buy in West Palm Beach, FL

West Palm Beach is a city occupying the eastern part of palm beach county with a population of about 107,000 where only 49% of that population are homeowners and the unemployment rate is at low 2.8%. You can find out more about west palm here.

Price to Rent ratio

The Median Monthly Rent rate is at around $1,772 a month ($21,264 annually).

Median home value is at $241K

This gives Wellington price-to-rent ratio (home value/annual rent) of 11.3

This is a pretty low price-to-rent ratio for the palm beach. Generally, anything below the ratio of 20 is within the BUY signal.

Tax Rate

West Palm current property tax rate is at $12.29 (per $1,000 of home value)  which is little bit above average for Palm Beach County: $11.18.
This is still considered relatively close to the PBC average so it probably shouldn’t sway the decision one way or another.

 

Rent vs Buy in Palm Beach Gardens, FL

PBG is a smaller community occupying the northeastern part of palm beach county with a population of about 53,000 where 71% of that population are homeowners and the unemployment rate is at  2.6%. You can find out more about palm beach gardens here.

Price to Rent ratio

The Median Monthly Rent rate is at around $2,311 a month ($27,732 annually).

Median home value is at $379K

This gives PBG price-to-rent ratio (home value/annual rent) of 13.6

This is in the lower range of price-to-rent ratio for the palm beach. Generally, anything below the ratio of 20 is within the BUY signal.

Tax Rate

Palm Beach Gardens’ current property tax rate is at $11.79 (per $1,000 of home value)  which is close to the average for Palm Beach County: $11.18.
Of the communities reviewed in this article, it is the lowest.

Conclusion

There are many factors that can play in your decision whether to buy or rent a home. Hopefully, now you are aware of two which can be easily measured based on the location. 

If you are interested in finding out tax rates and data to calculate price-to-rent ratios for communities not listed here, here are some websites where you can see the raw data and do the calculations yourself.

You can also always contact one of our real estate agents that can give you price-to-rent data and many other South Florida real estate market insights for the community you are considering. 

Looking to buy or sell a house?

Let one of our Realtors help you out with any of your Real Estate needs. We specialize in Palm Beach and Broward counties and have access to full MLS listings and favorable mortgage lenders.

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