Orange County – Why You Should Consider Buying Instead of Renting
If you live in Orange County, this year may be the best time to considering buying a home instead of renting. With rents steadily increasing (and expected to continue to rise as more distressed homeowners sell their homes and move into rentals), you may be able to own your own home for about the same monthly cost as renting, or less.
A recent OC Register article ran the numbers on renting vs. buying in Orange County, and found that the average monthly cost of owning a home in Orange County was $2,177 whereas the average cost of renting was $1,440 (making the difference between the two the lowest since 1989).
Although a quick glance at the numbers implies that renting is cheaper, consider the difference in quality between what you can rent for $1,400 and what you can buy for $2,200 a month. Rental apartments in desirable neighborhoods such as Tustin, Orange, and Irvine will run you between $1,400 and $2,000 or more for a 2-bedroom apartment at around 1,000 square feet. By contrast, recent clients of ours have taken advantage of the low home prices to buy single-family homes or condos, and are paying about $1,800 a month for a larger, better-quality home.
If you are considering renting a townhouse or a single-family home, rents are running between $2,500 and $3,000 for 2-3 bedroom townhouses or detached houses, more than what you would pay monthly if you owned the property. Increasing demand for such homes (as homeowners sell or move out of their homes) will drive up the rental rates.
To put it simply, you could pay over $2,000 a month to rent a spacious condo, townhouse, or single-family home in a desirable neighborhood, or pay the same amount or less and own the same home.
Owning your own home also comes with advantages such as:
- Putting your monthly payment towards building your own equity, instead of into your landlord’s pocket.
- Taking advantage of historically low mortgage rates, which make real estate one of the best investments of your money right now
- Taking advantage of depressed home prices to buy a property with future appreciation potential
- Tax savings for owning rather than renting a property
- The ability to plan for the future with a fixed mortgage at today’s favorable rates, in contrast to rents which are continually increasing and over which you have no control
- The freedom to do what you like with your own home
If you’re concerned about mobility should you need to move, the high demand for rentals should put your mind at ease. If you ever need to move, renting your home in Orange County will not be difficult and will generate ample cash flow to keep up your mortgage, property tax, and insurance payments.
If you have a good credit score and money available for a down payment, now is the time to buy a home.
We know that buying a home can be a daunting process, and we would be happy to answer your questions at a free buyer consultation. Contact us via our website or with the information below:
Markus Brown, BA, SFR
Heidi Brown, MBA, SFR