When looking for a place to live, people put a lot of thought into location, amenities and cost, but they often overlook the first question to ask themselves at the beginning of any house or apartment hunt: “Should I rent or buy?” People usually begin the process with a preconceived notion of what they’re going to do; unfortunately, that notion isn’t always based on careful consideration, soul-searching or research, but rather on what their coworker, family member or best friend told them to do.
Answering this question correctly is even more important when looking for houses or apartments in Los Angeles, since the housing market and the cost and availability of Los Angeles apartments can vary greatly from neighborhood to neighborhood.
It takes a special kind of person to rent an apartment, especially in L.A.
- A renter needs to be sociable and tolerant, among other things, because the neighbors will be close. However, one shouldn’t worry too much about problem neighbors in L.A. because Los Angeles apartments seem to turn over more quickly than in some other regions.
- On the plus side, apartment living is great for people who don’t like to be tied down in one spot for a long time and don’t have a lot of time, money, or expertise to use on leaky faucets and overgrown lawns.
It’s hard to compare costs of Los Angeles apartments, houses and condos due to the wide range of neighborhoods within a relatively short distance of each other and the different sizes and amenities of the dwellings. When looking at apartments, for instance, studio apartments in Los Angeles could be as cheap as $700 per month in a questionable neighborhood or as much as $9,000 per month in a great neighborhood.Houses, of course, vary just as much for the same reasons. Just comparing average prices, the average rent in Los Angeles is about $1,050.
People who should be looking to buy a home in Los Angeles are obviously those who are thinking more long term. If someone has a good job in a stable field, perhaps with a family or looking to start a family in the near future, a house is a great investment. In America, nothing says “success” like owning a nice home that you can decorate the way you want. Of course, houses are not without their drawbacks, too. Houses, even the newer ones, are money pits and there are many varying factors that can effect the cost of homeownership:
- There are two types of appliances in a house–those that are broken and those that will break someday.
- Landscaping will be an investment in time or money as well.
- The other thing to bear in mind is that neighborhoods change, and what starts as an upscale white-collar neighborhood when you buy could be gang turf 10 years later and you will be stuck living there or selling at a huge loss.
The average home price is about $374,000. If you assume a loan rate of 4.25% for 30 years and the average property tax of $3,500 per year, the monthly payment is about $2,075 per year, nearly double the cost of renting. Again, this is a generic comparison not an exact number; the estimate will vary, depending on the specifics of the properties, but a 100% difference in price should be enough to make anyone take a long, hard look at renting before signing the mortgage. This, of course, doesn’t take into account the tax value of deductible interest or the investment value of owning a property if the housing market rebounds.
In general, renting versus buying is a very personal choice, but one should consider all the factors carefully before rushing to a decision.
