Should you rent or buy a home in San Clemente, Ca? | Pros and Cons of Renting and Buying
Whether you're new to the area or are considering relocating to San Clemente, finding a home is an important first step! Do you prefer to rent? Have you thought about buying? Let's take a look at the pros and cons of each to see what may be best for you right now!
Ryan Schramm (00:00):
A big decision that my clients have to make is whether to buy or rent a home and there are pros and cons to both. So what's the best option for you. Stay tuned to find out.
Ryan Schramm (00:09):
Hey, everyone. Thanks so much for tuning in!
Ryan Schramm (00:12):
A big question, I always get asked...
Ryan Schramm (00:14):
"Should I buy or should I rent? And which one is better for me financially? What do you think?" I get that question all the time. So here are some things to weigh out. Some of the pros to renting are fewer upfront costs and paperwork. You've got freedom. You can be more mobile. If you need to get out of a lease, it's not that difficult. You don't own the home. As a renter, you're not responsible for maintenance and repairs. As a renter, there's no need to worry about falling home values or "Hey, what's the market going to do? Is it going to go up or is it going to crash?" As a renter, you can build credit. If your landlord reports rent payments to the credit bureaus, that's going to post and if you're in good standing, your credit score is going to go up. Additionally, as a renter, there are no property tax bills.
Ryan Schramm (00:57):
So with any positives, there's always going to be the cons. Let's bullet point the cons for you. As a renter, your landlord can raise the rent or sell the property. As a renter, your choices may be limited depending on vacancies. Right now, the rental market is crazy. There are hardly any rentals to choose from. That's forcing the price of rentals to go up. You might have to move multiple times. As a renter, you don't build any equity. And as a renter, there are no tax benefits. So when might renting, be the best option for you? Well, here's an example. If you're just getting into a new job or a new career in a new place or town, renting is probably a better fit for you. You don't have to immediately come up with the upfront down payment to buy a home. You don't get married to that specific community.
Ryan Schramm (01:43):
If your job changes and you're renting, so what? Change your rental. Let your landlord that know that you need to break, your lease, or maybe just do a short month-to-month lease. That's going to give you way more versatility in that situation than if you immediately tried to jump in and buy a new home, let's say. If you're curious, the median rental price in San Clemente as of April 2021 was just about $3,000 a month. All right, so now let's take a close look at the pros of buying a home. As a buyer. You may build equity and credit at the same time. Over the last five years, tons of homeowners have built equity in their home. Additionally, you've got no landlord to answer to. If you wanted to change the landscaping, if you wanted to paint the house, that's ultimately your decision. As a homeowner, you've got more stability, especially with schools. You're entering into a school system where you own a home, and then you also have possible tax benefits.
Ryan Schramm (02:38):
For example, if you have a mortgage on that home, the mortgage interest is tax-deductible. And then finally, if you own the home, you can improve it or upgrade it to suit your taste. So what are the cons of homeownership? Let's outline those. Ownership requires substantial money and paperwork upfront. Additionally, you could lose money if home values decline, and then there are extra expenses beyond mortgage payments. All those updates we talked about you being able to make, that cost money. Currently, rising home prices and low inventory in many markets is a negative thing. And finally, as a homeowner, you're responsible for repairs and remodeling. Now while buying a home comes with initial higher costs and a pretty sizable chunk of money for a down payment, I'm still an advocate of buying over renting and that's not just because I'm a real estate agent. The federal reserve indicates that when analyzing people who own their home over renters, homeowners' net worth on average is 40 times greater than that of renters'. The median sales price of a home in San Clemente as of April 2021is right around $1,250,000.
Ryan Schramm (03:48):
All right, so whether you've had thoughts about buying, selling, or renting, reach out to me. I'd love to be a resource for you. And of course, hit the little bell icon down below here and subscribe to our channel. We're always putting out the best and most relevant content for tips and tricks on what to do in today's housing market. Thanks so much. Take care.