So, you're thinking about moving here to the Fort Walton Beach area, and you're thinking, should I rent or should I buy? What's the difference here? What's going to be good for me? Well, in this video, we're going to go over whether that's a good thing or a bad thing or indifferent.

So, let's talk about Fort Walton Beach and whether you should buy or whether you should rent. Well, I can tell you right now as of the date of this video in 2022, trying to find a rental is insanity. And, trying to find a place to purchase depending on your price point is insanity. So, which insane do you want to go with? Well, they're both going to be difficult, but what's going to be best for you in the short run or the long run? And you're probably going to be like, yeah, Tim, you're real estate agent, it's probably buy. Right? Well, I'm not going to say that it is. Because sometimes it's not, and it depends on your situation. When I first got here in 2012, I was a staff sergeant in the air force, and I rented. But again, I didn't know anybody either back then. But there was, for a slew of different reasons of why we decided to go ahead and do that. So, I'm going to go over six different things where you can sort of tell what one thing may be good for you or maybe not good for you. So, let's figure this out.

1. Can I afford to Buy or Rent?

Can I afford to purchase? Can I afford to rent? Right? The big thing is with the purchase, because most people are like, man, I love it, that's american dream homeownership. Okay, can you afford it? And, it's not so much of, as we've been renters for so long, can I afford the monthly mortgage payment? Yeah, there's a little bit more expenses to go along with that.

One of the things that you need to know when you are purchasing a home is, well, first and foremost, if you're not military, you're going to have to deal with a Down Payment. Do you have 3.5% of whatever that purchase price is going to be? If you don't have that, then we're going have a little bit of trouble. If it could be 3.5 up to 5% all the way up and more. If you have that, then you might be good to go. But that's not the only closing cost. The other thing that you're going to have to deal with besides a down payment, is that thing I keep talking about, which is Closing Cost. That's the cost of doing business. Right? Now, here in the state of Florida, you don't have to pay your real estate agent when you purchase home typically. Right? All those costs for commissions are on the seller. We're free to you. Woo hoo. Right? However, you do have to pay for the cost of business, which we call closing costs. Most people, it could be upwards of 5 to 8 to $10,000 in addition to your down payment. That's pretty crazy. Right? So, you want to talk to your real estate agent depending upon your price point to see how much that could possibly be. That's not the only cost involved. You also have EMD or Earnest Money Deposit. It's not a big deal because most of the time we take that amount. It's usually 1% of the loan, and that goes back towards your closing costs. So, it's kind of a wash anyway. But you do have Inspection Costs as well. We have inspections, appraisals, those sort of things to make sure that you're not purchasing a lemon. Right? And we know what's going on with the house prior to getting into it. So, those could be some cost just in case you go into this and you don't like it. And now there was a couple hundred dollars that is now gone. Right? So, make sure that you know what these different costs are, what your closing costs, and down payment. And if you have that amount, then we're good to go and we can proceed. One of the best things about purchasing a home is one of the things that we're going to talk about later, which we like to call equity. Alright, let's be an investor. Alright.

Now, can I afford also goes with, can I afford not to purchase. If I'm just going to rent, do I have x amount that I'm going to be giving out? So, if that's the case, yeah. So, I'm going to go ahead and give this person $2,000 a month. The only problem is, if I'm giving $2,000 out a month, couldn't that money have been allocated somewhere else into another investment that's actually giving us money back. That's just smart money right there. So, if you can afford to do that, I would totally suggest that you go to the purchase route.

2. How Long Your Going to be Here?

Like a lot of people that move to our area, they're military. So, they don't know how long that they're going to be in one place. It could be six months, it could be a year, you know, it could be several years. Sometimes you just don't know, especially as an active duty military person. I know I used to be. So, depending on how long you're going to be here, is it worth it to go ahead and purchase? Well, if you're going to be here for at least two years, the average appreciation in the market is going to be 3-4%. And typically, it's going to cost you 6-7% of whatever the value of the home is to sell it later. So, as long as you're going to be there for at least two years, you're usually going to make out fine. Now, last couple of years, appreciation's been like 12, 7%. It's been insanity. But, as a by and large, that's going to be something you consider. Now if it's going to be shorter than that, you want to invest into real estate, you can always rent it back especially here in the FortWalton Beach area. There's such a high demand for rentals, you can charge a premium, get your mortgage paid off, and still have some extra to have some cash flow to build your investment portfolio moving forward. And, there's a cool thing that you can do with your VA loan that you don't necessarily have to purchase each one and refinance each time. But if you want more information on that, reach out to myself or my team here. We'd be happy to share that information with you.

3. Maintenance

Now, next question is maintenance. Now, when you own a home and the heating and cooling or one of those goes out, who gets to pay to fix it? You do. Right? So, you have to fix all those things. Now as a renter, you don't have to worry about that stuff. The landlord will fix it. It comes out of their pocket, one less thing. Now, it's not to say that things won't necessarily go wrong, but eventually they do go out, sometimes in roof leaks. We do have storms that roll through here that you will have to come out of pocket to fix some of those things. So, maintenance cost is something that you'll consider. You want to keep a certain cash on hand to make sure of that. And, also, if you're renting this property out, is it going to be enough to cover those expenses while they're gone.

4. Equity

Alright, number four, my favorite thing is equity. So, if you are going to purchase this home, it is accruing equity over time. Now, at the date of this video, your cash inflation here in the United States is at 7%. 7%, right? So, the cash just sitting there is just going down in value as you have it in the bank. But if you take that cash and put it into real estate, it's just going to keep going up. So, why not move what cash that you have into those homes? As long as you hang on to your home, it's going to, hopefully, everything being equal, it's going to accrue and make value over time. There's no indicator at least to us at this time that we are going to see a depreciation in values. We've only seen appreciation. Now, the rate of which appreciation is going up like last year was crazy. We'll see a deflation of the appreciation but it's still going to continue to go up as far as that's concerned. So, you do gain equity over time even if you're breaking even on your house. Okay? Alright. And, do you get equity when you rent? No. Alright.

5. Rent Increase

Rent increase and or just payment increase. Now, what we'll talk about is rental first. So, you're going to have a rental agreement six months a year whatever that it is. And, that's signed in the lease that you're going to pay x amount of dollars, which is considered $2,000 a month all the way through 12 months. And then, when it comes up to renew that lease, sometimes it goes month to month, but that's not always the case. Renew the lease, it may jump another 50, 100, $200. Reason being is that things that always seem to go up around here, the people that are owning the house, the taxes are going up. And just a couple of years ago, our insurance just went away and a whole bunch of carriers went away and then we had a smaller amount to choose from, which means that rates for insurance went up and taxes went up, which means that we as homeowners and landlords had to raise the rent to go ahead and supplement for that. So, even if you own a home, know that your taxes are probably going to go up over the years as well as insurance cost has a probability to do so. But as a renter, you don't have any control over that. They could bump it up whatever amount that they want to. If you don't want to pay it, too bad, there's somebody else out there that's going to be able to go, and then you got to worry about moving everything. Yeah.

6. Rental Demand is Insanity

Okay. So, last but not least, number six, let's talk about Fort Walton Beach specifically. The rental demand in this area is insanity. It's one of those things where you just have to be looking proactively and you can't look too far ahead, because what you're looking at now is not necessarily going to be there later. So, you have to, about 30 days out, start actively looking, putting your names on the list, putting applications in places. And, if you're coming from a big city, you'd probably found agents, real estate agents that just dealt with rentals and getting renters in rentals. We don't have that here. We just have the people that are managing the rentals and then putting them out on different advertising things and they're just moving. So, if you need a list of what rental resources to use, again, you can text our team, message our team, call us. We're happy to give you that information of what's working right now as it changes every time. But what's working right now and to keep your eye out on that. That being said, if you are purchasing, say that you're military guy or a contractor moving out this way and you end up purchasing something and have to rent it out. Don't worry too much about that. You should not have any problem renting this property out, build equity, and build your investment portfolio.

Well, that's all I have for, Should I buy or rent in Fort Walton Beach and the real questions you should be asking yourself. If you have any questions about anything that I mentioned here, feel free to call/text us at 850.320.7757 or email us at Admin@WhittemoreGroupRE.com