So, you’re looking at moving and you’re not sure if renting or owning a home is right for you…
You’re not sure if one is a better financial decision than the other…
You’re not sure if you’ll be able to find the type of house or apartment you’d like to live in…
You’re not sure what you can handle financially…
Well, this article will dive into ways you can learn how to know if renting or owning a home is right for you here in the Southern California area.
How To Know if Renting or Owning a Home here in Southern California is the Right Choice…
Throughout the 1950’s-1990’s, home ownership was a major goal of most families across America. Owning a home was the “American Dream” and if you didn’t own your house there was almost this stigma that went with that.
But, that rule has changed in recent years. The economic downturn paired with the bursting of the housing bubble makes renting an attractive option for many Americans… maybe even you.
In the past, the choice to rent or own here in Southern California was about whether you’d prefer to live in a house or an apartment. Now, there are opportunities to purchase apartments/condos and rental houses – so there are options for renters or perspective owners to live in whatever type of property that they prefer.
Renting is great for people who want flexibility. Perhaps you’re just starting your career, and you’d like to be able to relocate quickly. Renting is a wonderful option for people who like to “try out” various neighborhoods in their city before finding a place to settle down.
Owning a home ties you to one location for a period of time. It would destroy your credit to step away from your mortgage, and selling your home can be a long process that could end in losing some of your initial investment.
In some cases, contrary to popular opinion, it can be more cost-effective to rent a home than it is to own a home, especially in situations where the local housing market isn’t going up in value very much each year. While renters pay a fixed amount each month, homeowners are required to pay additional fees, such as homeowners insurance, maintenance, repairs and HOA (local community association fees).
It’s not always best to rent, however. Owning a home is still the American dream. You have the right to paint, decorate, and reconfigure your home however you’d like, without the worry of risking your security deposit or upsetting your landlord. It’s the ultimate in freedom when it comes to your home.
Homeownership as an investment. While the housing market has rebounded here locally in Southern California… the home values aren’t increasing like they were during the build up of the housing bubble (which is a good thing actually)… but another benefit of home ownership is homeowners typically enjoy the potential appreciation of the value of their home.
From 1968-2007 home values grew in Southern California by an average of approximately 7.4% annually. And, from 2008-2018 home values have gone up 50.4%! This appreciation has well outpaced inflation (as well as most other financial instruments).
As a homeowner with a fixed rate mortgage, you enjoy the benefit of inflation protection. For example, if your mortgage payment is $2,000 each month, you’ll pay that for the duration of your loan. However, the purchasing power of $2,000 can change significantly over the course of 10, 15, or 20 years. As most people’s income grows over time, a fixed- rate mortgage can eat less and less of your take-home pay each month.
There are many factors to consider when deciding whether to purchase or rent your next home. The key is doing exactly what you’re doing now… learning how to know if renting or owning a home is right for you.
The most important thing is to not take on any payments that you cannot reasonably expect to pay for the entire term of the agreement, whether it be $1,800 monthly rent for twelve months, or $1,800 monthly mortgage for the next 10 or 20 years.
Have You Considered Renting to Own a Home in Southern California?
There is another “hybrid” option to just renting or buying a house.
If you would love to own your own home here in our area – Riverside, Orange, San Bernardino or San Diego Counties – and…
- Just want to try a home out before you buy it
- You’re not able to get a home loan to purchase a home right now for various financial reasons
- You have some cash to put down on a home and can pay the rent and would rather work toward owning that house
…renting to own a home here may be right for you!
Check out the Rent to Own process here on this website and if you want to get on our list to see Local Southern California CA Rent to Own Homes… head over here to see available rent to own homes here in Southern California.
See our latest Rent to Own homes by going through the link below!