Have we reached a point where it’s cheaper to buy a house than rent an apartment?
According to a new report, in many areas of the country, it is. And the Orlando area is one of them.
“The appreciation on rent in Central Florida has outpaced the appreciation in houses if you can believe that,” realtor Barrett Spray said.
Spray has worked in Central Florida as a realtor for 30 years. He says the cost to buy a house in terms of interest rates is low compared to the cost to build an apartment complex.
“Then the cost to build an apartment complex is very expensive. The rents that they are charging for these apartments have gone way up,” Spray said.
The recent report comes from Realtor.com. It says the average price of rent in the U.S. has jumped 19.8% in January compared to a year ago
In Orlando, the monthly cost of buying a home is about 27% less than the average price of rent.
For example, a brand new apartment complex went up in Seminole County. It has three beds, two baths and is sized at 1,400 square feet. The rent: $2,800.
Barrett says the median price of a house is about $335,000. That puts the mortgage at around $2,100 which is $700 a month less than that $2,800 apartment.
“I’m looking at another one that is an efficiency. 391 square feet is $1,518 a month. That's a hotel room,” Spray said.
The downside is when you buy, there’s money to pay upfront and money to pay down the road for repairs but conventional wisdom says your house is earning you money, but your apartment isn’t.
However, there is also an upfront price to get into an apartment: first and last month's rent plus a security deposit.