California Real Estate: 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 has twice the real estate values than other average home values in other states. Higher home values means higher rents. Average rents in areas like San Francisco are north of $2,000 per month for an apartment. If you have a family and need to rent a single family home, you 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.
Renting In California: Buying Versus Renting In California
There are advantages of buying versus renting in California and first time home buyers should weigh the pros and cons of buying versus renting in California or just renting. If you do not know where you will live for at least the next five years, your option may be best to be a renter. 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, you do not have to worry about repairing it and all you need to do is contact the landlord. Utilities such as water service and scavenger services are paid by the landlord or property management company. You 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.
Negatives In Being A Renter
Disadvantages of being a renter is that you always need permission to do something to your rented apartment or home. If you want to put wall paper up or want to paint a room, you will need landlord permission. If you want a pet, you will need landlord permission. If you want to do landscaping on plant a garden, you would need landlord permission. Another major negative factor in being a renter is that you have no home stability. The landlord can always not renew your lease or ask you to move out even though you are paying your 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 and 3.5% down payment for FHA loan home buyers. Home buyers who qualify for VA loans and USDA loans do not need any down payment. Most home buyers do not have to worry about closing costs because closing costs on a home purchase can be covered through a sellers concession or a lenders credit towards a home buyers closing costs. Home buyers in California can write off their mortgage interest expense. Home buyers in California will develop equity in their homes as they pay down their principal payment by making their monthly mortgage payment and will develop equity in their homes as years pass and as the California housing values increase.
Qualifying For A California Home Loan
If you have documented income in California, you will qualify for a California home loan. Many renters just assume that they do not qualify for a California home loan because of the housing prices and the down payment requirements. Down payment is minimal and if the renter does not have the necessary down payment, down payments can be 100% gifted by family members and/or relatives. Many landlords in California will require security deposits if you are renting. Some require, first months rent, last months rent, plus an additional month for security deposit. This is a large amount and often times the security deposit the landlord is asking will be enough for a down payment for a home purchase in California. If you are a renter and have documented income, please contact me at 262-716-8151 or email me at firstname.lastname@example.org to see how much home you qualify for in California and how much you can afford.