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Should you rent or buy in California?

If you are thinking about whether to rent or buy in California, we can help you make the right decision. Read about all you need to know before you make the choice.



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It is not easy to give an answer to this question, and in many cases, it’s situational. The decision to buy comes with a great deal of responsibility. Not only because of the momentary situation on the market but toward the future predictions of the value of the property. Moreover, it can be one of the most important decisions you will make in your life so it’s reasonable to be a hard one. Rent or buy in California, like in any other part of the States, depends on more than a few factors. Do you plan to start a family? Are you already having kids? Is your job stable and steady? What are your future plans? These are all the questions you need to answer in order to decide what is right for you.

Numbers behind rent or buy in California

What makes more financial sense is the usual question we ask ourselves in many situations. There are many calculators available on the internet which can help us with the rough estimates. However, when it comes to a real-life situation, calculators often overlook the factors we mention above. The total costs of buying a property cannot be estimated without additional costs over time. The same goes for renting. So, it’s in our best interest to try to predict and compare those future expenses. On the other side, many people are not in a financial position to buy immediately. They have an option to loan money, and in that situation, you can’t be always sure if that is the right way. The market changes, the costs, and tax changes, and even your future moving plans may change.

The costs of buying vs renting

If you decide to buy, know that your monthly expenses will include:

  • monthly mortgage payment
  • insurance
  • taxes
  • repairs and maintenance
  • additional improvements and upgrades

With the attention to mortgage interests, property tax deductions, and investment appreciation which are benefits of owning a property.

On the other side, the costs of renting include:

  • monthly rent
  • renter insurance

The benefit of renting is that you don’t have to bother yourself with the maintenance of the property in most cases.

In general, it is possible to calculate the time frame after which you will have the return of the investment. Looking at this, places like San Bernardino and Lancaster have much better returns if you buy compared to renting. While areas like Newport Beach and San Marino have unusually high housing prices so it makes more sense to rent.

Buying in California

There are many advantages and disadvantages of owning a home in California. The positive side is that you are investing in a real estate property whose value will probably increase over time. Having a mortgage with a fixed rate will provide you with more predictable calculations about the potential value in the future. In fact, it noticeably differs from renting which can be risky and unpredictable. However, there are costs involved in homeownership which don’t exist if you are renting. Maintenance and additional changes in your home, utility bills for the entire property, and property taxes.

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Renting in California

Renting, on the other hand, has its own benefits and flaws. You don’t have to deal with maintenance but you are giving your money to someone else instead of investing. Luckily, the current situation is that there are many places in California where the monthly rent is still better than the monthly mortgage expenses. Making it perfect for people who don’t want to invest a considerable amount of money in ownership.

General guidelines

If you know you are going to live in a certain place for several years, then consider buying. Also, this might be a better option if you have enough money on your account. Otherwise, if you know you will be just a temporary resident for a while, then it’s better to rent. In this time of fluctuations and opportunities, people usually move a couple of times before settling down. An average person in America moves about 12 times before making its permanent residence. The possibility to relocate anywhere in sunny California just confirms it. Carefully analyze your situation and make a call.

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For military personnel

The decisions for military personnel depend greatly on financial and career expectations. Also, emotional and practical concerns involving the family is a crucial element. Being a military member brings certain instability in a way that you can always be called upon to change your residence, even a town. So, the preferable option would be renting at first. Later on, when you progress in your career and have more reasonable options, you can choose to buy a property. For veteran retirees, buying is an excellent option since they have many benefits earned for serving.

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Millennials and their choices

Even though the latest trends show that Millennials are one of the biggest buyers in the field of entry-level homes, one problem remains. There is simply not enough property to cover the demands. The competition is big and because of that, many areas witness the price increase. This, as a result, force the great number of Millennials to go back to renting. Even though numbers are showing that buying a property would be a better option, sometimes it’s not possible. Another interesting point is that many Millennials are moving to suburban parts in search of more budget-friendly options.

Maybe a solution

A partial solution to the general rent or buy in California problem may be the rent-to-own real estate concept. In general, it combines the flexibility you have in renting with the long term benefits of ownership. You pay the rent for a certain amount of time, then, you decide if you are willing to buy the property. There is no obligation and you have up to 5 years to make a decision. Unfortunately, this concept is not available in all parts of California.