Renting vs Buying: What is Better
A forever popular question, forever the subject of different discussions. Even professional movers in Los Angeles have no answer to the question of what is better. There is only an answer to the question of what you need and what fits your financial plans.
Whether you want to save now and pay less at the beginning by renting, or to put down a downpayment for the ownership and expect to build equity in the future, is the only thing that matters. Some people prefer to take risks and choose the stability of their own home, whilst others love to stay flexible and open to new possibilities, chances to change places, cities, countries. The second is a lot easier if you are a renter than If you are an owner.
Let’s see some pros and cons for both!
Renting in Los Angeles
Lots of people in Redondo Beach are deciding on renting. Especially If we are talking about studios, one and two-bedroom apartments. This option has its advantages and disadvantages, of course.
When you scale these two, you can see If you’re leaning towards renting or not. There is no advice on what is better, there is only a conclusion of what you need and are ready to afford.
Lower housing costs
To rent a place, usually, a landlord is asking for a first-month rent and a last-month rent. Sometimes a deposit too. The first payment that you are making is not as considerable as If you decided to put a downpayment for homeownership.
Lower monthly payments
In some cases, rent can cover utility costs. Also, paying the rent monthly is way less than paying a mortgage, for example.
Living in a community
If you are living in a community, you probably have a Homeowners Association (HOA). This is great because you won’t have to worry about everyday chores, they will take care of that, like for example mowing. You will have all the time for yourself only. And that will cost you a few hundred dollars per month.
Moving in Los Angeles will be easier
When you’re not an owner, it is a lot easier to move within a city, or out of a city. If you paid your bills and your lease is expiring, you can just hire furniture movers in Redondo Beach to relocate you.
Maybe you got a new job in another state – you just cancel your housing and you’re on the first flight out! With homeowners, it is not that easy.
No renovating or maintenance costs (or minimal)
Since you’re renting, there’s not much room for renovations. Maybe just painting the walls and rearranging the furniture. That is a save! No big spendings on huge renovating projects.
If you need a plumber – you let your landlord know and he is taking care of it by all means!
No long term commitment
When you are about to sign a lease for the place, it doesn’t have to be a long-term commitment. If you don’t grow into loving your new place, you can simply leave it!
No equity in the future
You are paying rent and bills monthly, but you’re not gaining ownership. You are not throwing away the money, but you are not investing in real estate. Therefore, no equity, like If you were a homeowner.
Even though you’re signing a contract, your homeowner can always tell you that he decided to sell and that you need to move out. Or that they are renovating and preparing a big project and that you can’t keep on living there.
You will have to move out and hire movers in Redondo Beach to move you to a new place that you are still to find!
No tax deductions
Homeowners are getting serious tax deductions based on their mortgage and that helps them to balance out the interest. Renters don’t have any tax incentives besides the ones that are valid for every taxpayer.
Housing costs are not certain
They can change, and they are changing, unfortunately. They are getting more and more expensive. The contract doesn’t protect you, it expires ( and these aren’t long-term contracts, like mentioned), the landlord increases the price and you will have to take it or leave it.
No complete privacy
There will always be something that you can’t do. Time of the day when it won’t be appropriate to have guests etc. This can’t happen If you’re the owner because you’re setting up the rules.
No community ties
Usually, renters are not sticking to one place for too long, therefore they are not building any strong community ties. They’re simply not the owners, and the current neighbors will remain in the past when they move away.
Owning a Home in Los Angeles
To own a place brings a lot of benefits, stability first of all. This is important for young families that are trying to raise their kids and grow roots somewhere. This is not the best option for those that have a wild spirit that always leads them somewhere else. And to change a place when you are a homeowner is more expensive than when you’re renting.
This has its pros, but also its cons.
Stability and the pride of homeownership
Like we mentioned, owning a home brings stability to a family. An investment for the future that helps them to make long-term plans in various fields.
This is almost certain as the market is in bloom. Buying now so you can profit from it in the future. Or sell it when you retire and travel the world. Homes are typically increasing in value, so it’s a very small risk to be taken If you’re choosing carefully.
Serious tax deductions
As a homeowner, you can enjoy tax deductions based on your mortgage rate – of course If you have enough deductions to itemize by tax law.
Certain monthly expenses
Depending on the mortgage rate that you take, and we hope that it’s a fixed rate, you will be paying the same amount each month. And with that, all other monthly bills.
Strong community ties
Since you’re growing roots here, it’s probably a homeowner’s neighborhood. Your neighbors are not migrating that much and you can make strong ties with the whole community. Your kids will go to the same schools etc.
Privacy and flexibility
You’re an owner. No one is setting rules but you. When you are craving privacy, you will have it. When you are up for a Sunday barbecue, you will invite your friends and their families. There are no boundaries as long as you don’t want them.
Significant down payment
As opposed to renting, where you’re giving a security deposit and maybe two months’ rent, If you want to buy a home, you will need to put in a significant down payment. The bigger the down payment, the better the terms of the contract.
Well, this is not always a rule, but If that’s the term that they’re requesting, you will have an expense of closing costs.
Relocation is more expensive
When you are a homeowner, and If you decide to sell and move, It will be a lot more expensive than If you were renting and you just have to cancel the housing.
Professional furniture movers in Redondo Beach, even if you found reliable ones, will be a hit to your budget also. Since you weren’t renting, you have a lot more household items than the renters, obviously.
As to what is the cost to hire movers in Redondo Beach, if you are thinking about selling, ask around and get a quote!
Renters have the HOA, and you? Well, you have you and prepared a budget, we hope! There is a big list of things that you will be paying from your pocket If you’re owning a house.
- All types of maintenance and repairs
- Trash pickup
- Lawn mowing
- Property taxes
- Different insurance expenses etc
This can be also an advantage, you have a place and you want to update it, renovate it. Refresh the curb appeal or the inside of the house. And you can! Because you own it!
But, when you start with one project that you wanted, that usually leads to another one that was unexpected, to change the outdated pipe for example. All you wanted to do is to renovate the bathroom, and now you are dealing with the sewage system.
Or you wanted to clear out the garage but you realized that you hoarded a whole lot of things that you need to move from there. You will need to either get rid of them or put them into storage. And for this, you will need residential movers.
And the story goes on!
The main reason we are putting this as a disadvantage is that, usually, these projects are not putting value into your house.
Change on the market
A lot of things can usurp the market in the area. A big company can move out its office from the neighborhood and have their employees move out as well. This would result in many empty homes and the price can go down. This is one of the ways to lose what you invested.
Trying to build equity can easily become a failed investment. It is a big investment and a big risk If we put it like this. But still, more people are choosing ownership rather than renting because it brings stability and a place to raise children.
The Age of Renter vs Buyer
This is an interesting factor in the analysis. Overall, when you take into consideration everything that we talked about, we can come to one conclusion.
Younger people will probably lean towards renting. They won’t have a big investment to start with so they can buy a home. They probably just started working. They are trying to find themselves, they love to travel and to keep their options open. It is easier for a younger person to move to a different city or country for work than for an older one.
Mid-aged, young couples, and older people, are either used to comfort and stability or are trying to establish that.
Young couples most certainly will try to save and invest in buying so they can make solid grounds for their future family. On the other hand, young people are usually not ready for this big commitment. We usually say this because every rule has its exceptions.
So, Are You a Renter or a Buyer?
With all this being said, it is easy to say that you might have an idea of what you would prefer. So many “pros” and “cons”.
If you are on a verge of change in your life and you’re deciding between these two options you will need a whole lot of thinking, a little bit of math for the financial plans, and to wear a vest made out of patience!
Whatever you decide, and If you are in need of movers in Los Angeles – we will be happy to share what we know with you. Whether it’s the knowledge that we get from our clients or from our experience. And of course, a professional moving service for every outcome! Give us a call!