Pros And Cons Of Buying Versus Renting In California
This article is about Pros And Cons Of Buying Versus Renting In California
The state of California has one of the highest real estate values in the nation.
- California also has one of the highest cost of living in the nation
- Everything in California is higher than the rest of the nation from taxes on goods and services, to real estate taxes, and rent
- On the flip side, California workers make substantially more than the national norm
- Some areas of California have twice the real estate values than other average home values in other states
- Higher home values mean higher rents
- Average rents in areas like San Francisco are north of $2,000 per month for an apartment
- Those with family and need to rent a single-family home can expect to pay more than $3,000 per month in rent in many parts of California
- Renters should consider buying versus renting in California
Things Renters Should Consider When Buying Versus Renting In California
There are advantages of buying versus renting in California. First time home buyers should weigh the pros and cons of buying versus renting in California or just renting. Those who do not know where they will live for at least the next five years, renting may be a better option:
- A California renter does not have to worry about maintenance when they are a renter in California
- For example, if the furnace or air conditioning unit breaks, renters do not have to worry about repairing it
- All they need to do is contact the landlord
- Utilities such as water service and scavenger services are paid by the landlord or property management company
- Renters can always move out without the worry of window dressing the home and hiring a realtor and taking months for your home to close
You do not have to worry about the upkeep that comes with the responsibility of being a homeowner.
Buying Versus Renting In California: Negatives In Being A Renter
The disadvantages of being a renter are renters always need permission to do something to a rented apartment or home.
- If renter want to put wallpaper up or want to paint a room, they will need landlord permission
- If renter want a pet, they will need landlord permission and possibly an additional security deposit
- If renter want to do landscaping and plant a garden, they would need landlord permission
- Another major negative factor in being a renter is they have no home stability
The landlord can always not renew their lease or ask renters to move out even though they are paying rent on time.
Advantage Of Being A Homeowner In California
There are many benefits of being a homeowner in California. California took a major hit when the 2008 Real Estate and Credit Collapse happened.
- Real estate values plummeted throughout the state of California
- Even though real estate prices have been recovering, there are many areas of California that housing values have not yet recovered pre-real estate collapse values and still have upside value
Down payment on a home purchase in California is very low:
- 3% down payment for conventional loan home buyers
- 3.5% down payment for FHA loan home buyers
Homebuyers who qualify for VA loans and USDA loans do not need any down payment:
- Most homebuyers do not have to worry about closing costs
- This is because closing costs on a home purchase can be covered through a sellers concession or a lenders credit towards home buyers closing costs
- Homebuyers in California can write off their mortgage interest expense
- Homebuyers in California will develop equity in their homes as they pay down their principal payment by making their monthly mortgage payment
Will develop equity in their homes as the years pass and as the California housing values increase.
Qualifying For A California Home Loan
Consumers who have documented income in California will qualify for a California home loan.
- Many renters just assume that they do not qualify for a California home loan because of increasing California housing prices and the down payment requirements
- A down payment is minimal
- If the renter does not have the necessary down payment, it can be 100% gifted by family members and/or relatives
- Many landlords in California will require security deposits from renters
- Some require, first months rent, last months rent, plus an additional month for the security deposit
- This is a large amount
- Often times the security deposit the landlord is asking will be enough for a down payment for a home purchase in California
California renters with documented income, please contact me at 262-716-8151 or text us for a faster response. Or email us at [email protected] to see how much home you qualify for in California and how much you can afford.