Is renting better than buying?
Friday, September 11th, 2009
Beachfront properties are the rage among baby boomers. Or so it seems. These days, the value of purchasing properties in beachfronts is being questioned, particularly whether it is a sound investment or not. Some would rather rent instead of own.
What we saw were a lot of rental signs with price tags that still seemed too high (to me anyway). For example, the condo we stayed in at the beach would sell for around 1.65 million — even though the rent on it was pretty low, nowhere near enough to cover the mortgage even if it rented steadily. Apparently, some investors don’t think that prices are too high. According to one real estate paper, Palmetto Previews, baby boomers are looking to buy second homes, vacation properties and retirement venues in the “red-hot South.”
Not only boomers, but even corporations and investment houses are gobbling up beachfront prime properties. Particularly with today’s weakening dollar, compared to the Euro and other currencies, foreigners are getting into the game.
However, for some financial analysts, this could be considered a “quick-flip” investment opportuinity. Say, if a generation of baby boomers did have a huge amount of holdings in similar type properties, and if one day all of them retire and decide to sell at the same time (to cash in), how would this affect the value of the commodity? Of course, with increased supply, the price usually falls. And the value of your beachfront assets would definitely fall should that day come.
So if you want a beachfront vacation house, would you rather rent or own?




