Last night I visited a dear friend of mine whom I love to call my "LA mum". I met her 10 years ago when I was a student and needed a nanny job to pay the bills. She hired me and I immediately became a part of this amazing family with kids, dogs, cats, ferrets, hedgehogs... you name it they've had it! It was actually her real estate agents in Hancock Park that gave me my first real estate gig and taught me so much about why Los Angeles is the best place to buy a home!
As we sat on the back porch under the fairy lights catching up we started discussing the value of her current home which she bought about 5 years ago. She was telling me how much the flips around her house were selling for... we did the math and realized that in the last 5 years her home value has gone up roughly $250,000.
I'm not joking.
If you've read any of my other posts you know I'm not joking. Los Angeles is continuously growing and with that population growth comes more demand for home ownership. You know the drill!
So really the renting vs buying discussion is a no brainer. Seeing as I was in the Valley Last night let's use their numbers as an example to get you motivated!
In North Hollywood you can rent a 3 bedroom house averaging $2700 / month. Over a 5 year period that is $162,000 spent on rent that you will NEVER GET BACK!
In North Hollywood 5 years ago you could have bought a 3 bedroom house for $400,000 and it would now be worth $650,000.
In one scenario you throw $162,000 down the toilet.
In the other scenario you make $250,000 in equity. Also don't forget if you were getting an FHA loan with a 3.25% interest rate on roughly $400,000 and a 30 year loan your payments would be closer to $2,000 (rough estimate but savings of $700 a month!) and you would pay off about $50,000 of your loan in that 5 years. (Again these are rough numbers but I have some really great lenders who would walk you through the process of pre-qualifying and what your payments would look like in a heartbeat).
So let's add up that extra $700 / month that you get to save ($42,000), plus the $50,000 of your loan that you have paid off and the $250,000 you made in equity if you sell your home you're coming out of this with close to $350,000!!! I mean - where else did you make $350,000 scratching your ass for 5 years?
Of course there are taxes and fees that will come up when you sell your home and I will write an updated 2017 guide to this. But for now I'm just trying to convince you that renting vs buying it is always a no brainer - you just need the right realtor to get you into the right home!!
Let me know if you want information on pre-qualifying for a home loan and what it takes. You may be surprised and how quickly you could be buying a home!
As we sat on the back porch under the fairy lights catching up we started discussing the value of her current home which she bought about 5 years ago. She was telling me how much the flips around her house were selling for... we did the math and realized that in the last 5 years her home value has gone up roughly $250,000.
I'm not joking.
If you've read any of my other posts you know I'm not joking. Los Angeles is continuously growing and with that population growth comes more demand for home ownership. You know the drill!
So really the renting vs buying discussion is a no brainer. Seeing as I was in the Valley Last night let's use their numbers as an example to get you motivated!In North Hollywood you can rent a 3 bedroom house averaging $2700 / month. Over a 5 year period that is $162,000 spent on rent that you will NEVER GET BACK!
In North Hollywood 5 years ago you could have bought a 3 bedroom house for $400,000 and it would now be worth $650,000.
In one scenario you throw $162,000 down the toilet.
In the other scenario you make $250,000 in equity. Also don't forget if you were getting an FHA loan with a 3.25% interest rate on roughly $400,000 and a 30 year loan your payments would be closer to $2,000 (rough estimate but savings of $700 a month!) and you would pay off about $50,000 of your loan in that 5 years. (Again these are rough numbers but I have some really great lenders who would walk you through the process of pre-qualifying and what your payments would look like in a heartbeat).
So let's add up that extra $700 / month that you get to save ($42,000), plus the $50,000 of your loan that you have paid off and the $250,000 you made in equity if you sell your home you're coming out of this with close to $350,000!!! I mean - where else did you make $350,000 scratching your ass for 5 years?
Of course there are taxes and fees that will come up when you sell your home and I will write an updated 2017 guide to this. But for now I'm just trying to convince you that renting vs buying it is always a no brainer - you just need the right realtor to get you into the right home!!
Let me know if you want information on pre-qualifying for a home loan and what it takes. You may be surprised and how quickly you could be buying a home!
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