Rent or buy in Florida?

The same decision at five different horizons

A $400,000 home in Miami-Dade against $2,600 rent, 20% down at 6.75%, rent rising 3% a year, the home appreciating 4%, and the renter investing every dollar of the difference at 4%:

The comparison most calculators get wrong

Two things decide whether this comparison is honest.

First, the renter has to invest the difference. In most years the buyer's monthly cost here is higher than the rent. A comparison that lets the renter simply spend that difference and then declares owning the winner is not a comparison. Here both sides are given the same monthly budget — the larger of the two payments — and whoever spends less invests the remainder at 4% a year.

Second, selling costs money. Roughly 8% of the sale price between commission, documentary stamps, title and settlement. Leaving it out is what produces the three-year break-evens you see quoted.

Three things owning gives you that rent does not

• Principal. Part of every payment reduces what you owe. It is small in the early years and large later — the opposite of what people expect.
• Appreciation on the whole house. If you put 20% down and the home rises 4%, you earned 4% on an asset five times your cash. That leverage is the real argument for buying, and it works identically in reverse.
• The homestead exemption. A renter cannot claim it. Over ten years in Miami-Dade it is worth $7,754 on this home — and the 3% assessment cap behind it is worth more still.

Where these numbers come from

Millage: Florida Department of Revenue, 2025. Insurance scaled from the standardized $300,000 dwelling policy priced at $8,471 for Florida by Quadrant Information Services. Maintenance 0.5% of value a year, buyer's closing costs 3%, cost of selling 8%, and the renter's alternative investment 4% a year — all stated assumptions, not measurements. Appreciation and rent growth are yours to set; no source can supply them. The mortgage interest and property tax deductions are deliberately excluded, which understates the case for buying.

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