Profile picture for zuser20140329102816595

why are homes much higher to rent than an actual mortgage?

I see nice very nice three or four bedroom homes for low prices, the estimated mortgage is at least no more than $600(on what I've seen)...then I search for rentals and the rental price is almost $200 more...why is that? People would get their homes off the market faster but who really wants to pay higher to rent?? If I could rent a nice 3bedroom house for a nice price that would more than likely make me want to become the owner... which would lead to me staying longer..are sellers not thinking or is that just how the game goes?? it's all about getting the house off the market and money in your pocket right??
  • April 17 2014 - Gainesville
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Answers (5)

Profile picture for wetdawgs
Rent amounts are not determined by the monthly mortgage payment, they are determined with competitive rates within the community.   If a person's mortgage was $1000/month and competitive rent was $800/month, they  would still only be able to charge $800 per month.    That's what is called "free  market".   Your option?  buy your own property when you are ready and where you wish to live. 

When one owns a home, things such as paint inside and out, carpet, roofs, plumbing etc need routine maintenance.   Sometimes this doesn't happen while the tenant is living there, but it often happens between tenants.   Roofs and air conditioners may only be replaced every 20 years, but a savy property owner knows these expenses occur periodically and saves up for the expenses.




  • April 17 2014
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Profile picture for zuser20140329102816595
So OK how can a owner charge 200 more just for something like repairs....what if nothing needs to be repaired the entire time of your lease? I just find it a little crazy, I understand the taxes part. I will never purchase a home in Florida though. ..they are way too overpriced. Compare homes in Florida and Georgia...
  • April 17 2014
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Hey guys,

It's called "Today's Market Conditions"

1.  Sale prices of homes are still somewhat depressed although compared to last year things look pretty ggood.

2.  Mortgages are hard to get so rents remain high

3  Interest rates are still very low keeping monthly payments low
  • April 17 2014
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You are making some potentially erroneous assumptions. For example, the owner may be underwater on the home or may have more than one mortgage that needs to get paid. Additionally, if the property is an investment property, why wouldn't the owner use it to make money? As Wetdawgs says, the landlord likely isn't making much if anything by charging only $200 more than the mortgage as rent. Keep in mind that he/she is also responsible for making repairs on the property and maintaining it in rentable condition. If you want a home where you pay mortgage price only, you may want to consider purchasing a home yourself. The Florida market is improving!
  • April 17 2014
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Profile picture for wetdawgs
There are many reasons, some of which:

1.  The landlord is paying taxes and insurance, in addition to mortgage.
2.  The landlord pays for maintenance and repairs of the home.
3.  The landlord has equity in the property that could be earning interest elsewhere.

If mortgage is $600 per month and rent is $800, the landlord is lucky if they are breaking even on an annual basis.
  • April 17 2014
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