Renting Vs. Buying

I LOVE RENTING, said no one ever.

I want to share with you why it’s ultimately better to own than rent. The housing market across California has had large price gains over the past years. You often contemplate whether it is more beneficial to buy a property now or continue renting. To assist with this decision, I have looked at the costs and benefits of renting versus owning property in California and eight of its local regions over a seven-year time horizon. But first, here’s a quick top ten list why it’s better to own.

TOP 10 Reasons to Own

  1. Predictable Monthly Payments
  2. Appreciation
  3. Tax Benefits
  4. Freedom to Make Modifications
  5. It’s Cheaper
  6. Privacy
  7. Built-In Rainy Day Fund
  8. Community Ties
  9. A Secure Retirement
  10. It’s ALL Yours

The costs of buying include:

  • Monthly Mortgage Payment
  • Insurance and Taxes
  • Improvements and Repairs

These costs were offset by the benefits of buying: mortgage interest and property tax deductions, and investment appreciation

The costs of renting include:

  • Monthly rent payment
  • Renter Insurance

Which were offset by the benefits of renting: the appreciation on investing the down payment in the stock market.

For the State of California, consumers can save 96.5 percent per month by buying a property. At the local level, buying in Los Angeles County will save you 96.4 percent per month.

In several counties, given price and rent appreciation, buying will net the individual income over the seven-year time frame. For example, buying in San Francisco and Alameda will net the owner 119 and 106 percent respectively per month over the purchase time horizon.

Over the 7-year horizon, buying makes sense financially. I mean who doesn’t want their own home to do whatever they want to it without your landlord complaining about it.

Several web pages can provide more personalized recommendations given your own income, and a local situation with regards to purchasing and rental prices. 

As always thank you for reading, I appreciate you and your time .