Tuesday, October 01, 2013

Buying a home in Miami Beach for the first time: what you should know 

When considering the option of buying a home in Miami Beach, there are two specific questions each potential buyer must ask:
1. What are the costs to owning my own home?
2. Would it be cheaper in the long run to rent?
There are some Miami Beach residents who will tell you that it’s a clear-cut fact that renting is just throwing your money down the toilet, as the costs for a house payment are almost the same.  Given both options, I will discuss the pros and cons of each with the hope to allow you to make a suitable decision that will match your living requirements.
Firstly, you'll need to consider your financial stability and affordability to the fact, whether you will be able to maintain the costs associated with home ownership. You'll need to make that initial down payment which is relative to the sum of money borrowed at a percentage value and a monthly payment figure on the remaining balance.
This monthly loan repayment sum, will not only include the principal monthly payment, but will also include the home insurance, insurance for mortgage and may as well include additional applicable taxes.  If you decide on taking the option of taking the rental route, then you'll most likely not be accountable for the overall maintenance of the property, as you have the ease of being able to call upon your landlord for all upkeep and repairs, however, minor. There are some rental options which the rental amount will be inclusive of utilities such as, phone, power, water, etc., whereas with owning your own home, you are solely responsible for ensuring that such utilities are paid on time with respective of your billing cycle.  Now you're probably wondering; well, which one should I do; Rent or Buy?
Don't despair I am going to enlighten you on the yes and no’s associated with renting and owning your own home in Miami Beach.  When to Rent?  You may want to consider renting a home for the first time, not being familiar with the neighborhood and may need some time to get a feel about the area before you commit yourself into buying a home.  If the mortgage rates are high, you will almost certainly want to wait until the market rates depreciate, making it financially affordable. If you're in the transition phase of looking for a job, new girlfriend, recently divorced, just married or all of the above; then you probably will not be financially stable to sustain the loss of owning your own home initially with the added responsibility of making monthly payments, fees, utilities and maintenance. In a case such as this, it is generally recommended that you take the rental option.

Buyers and Sellers markets:
You've probably heard the terms when considering buying your first home. You need to pay close attention to this particular pointer when buying or renting. If you're looking forward to buying your first home in a seller's market, you'll probably want to reconsider this option and take the rental route. It has been noted that during the seller's market, homes are easily sold and home price's peak to the highest value. This market allows little or no room for negotiation as buyers are forced to settle for high sale prices as they find themselves competing with other buyers for the same property.
The buyer's market, however, or as I like to call it, the educated market is one in which there is a surplus of homes with little or no available buyers forcing the prices to plummet in this region. This is the time to buy. Noted as educated market buyers are required to strategically make a purchase when the value is at its lowest right before the market recovers and the prices go up.  With these notable factors, it is easily seen where the benefits of renting a home gains preference over home ownership.  The American dream of Home Ownership is a dream of every resident, as this option gives rise to a variety of intangible benefits received when one makes this huge commitment.  When you have made the decision to purchase, you become immediately eligible to what is referred to as Tax Breaks. These tax breaks are generally a series of deductions from your income taxes payable to the IRS written off as breaks such as mortgage interest, taxes paid for real estate and other taxable amounts associated with purchasing a Home or Condo.
Working from home also allows additional Tax breaks in the form of utilities. It is best. However, to check with your accountant to ensure which tax breaks are applicable to you under Florida Law.
Purchasing your initial home or allows you to immediately incur a monetary value to your new property. It is important to note that when you have taken a loan for the purchase of your new property, most if not all the first few payments are directed towards the interest portion of the loan with the remaining balance scheduled for the principal balance. Equity, otherwise termed as value of property, is determined by the duration of time you as the home owner lived at your newly purchased residence, which increases the longer you live there. This is easily translated into monetary profits should you decide to sell your home. This value can also be made available as securable funds which can be used for home improvements such as remodeling your bathroom or effecting additions to your home.  When purchasing your own home you have the option to make whatever changes you decide in relation to your own personal style or expressive nature in the form of colors, designs and accessories for your home without having to seek permission from a landlord or caretaker. Although this option does have its limitations should you reside in an area governed by a home approval association with certain rules and stipulations in which you may not be able to simply just do as you please.  The purchase of a home is a very serious financial commitment and not one which should be taken lightly as you level of responsibility must be aligned with your commitment and desire to maintain and uphold the tasks associated with home ownership.
Renting; however, is more of a temporary measure as I like to call it "getting your feet wet" preparing to take the plunge of owning your home.

Article courtesy of Jairo Fuentes at  www.southbeachcondosforsale.com 

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