- April 25, 2024
- Posted by: legaleseblogger
- Category: Related News
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# Evaluating Buying vs Renting in Southern California
I first made an offer in 2017, but have always faced counters. The real estate market in Southern California, particularly in San Diego, has only become crazier in the past seven years. Given the current state of the market, I am hesitant about whether buying or continuing to rent makes more financial sense.
## Financial Overview
### Income and Household Situation
– My income consists of a 170k base salary, 80k in RSUs, and a 20k bonus, totaling a TC of around 270k.
– Our household income is 270k, with my wife currently a stay-at-home mom but capable of bringing in an additional 80-100k if she were to return to work.
### Assets and Debts
– We have approximately 350k in liquid assets for a downpayment and another 350k in retirement accounts.
– Our NW also includes two paid-off cars and no outstanding debts.
### Property Details
– The property we are considering is a new townhome priced at 880k with a HOA fee of around 500 dollars.
## Buying Scenario
I planned on making a 300k downpayment, resulting in a 550k mortgage at a 7% interest rate. When factoring in taxes and the HOA fee, the total monthly cost comes to around 6.5k over a 30-year period.
## Renting Comparison
Currently, we are renting a home for 4.2k per month, which is valued at around 1.4 million in the market. Despite the newness of the townhome, it would be considered a downgrade from our current rental property.
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## Conclusion
Given the uncertainty in the tech industry and the potential for layoffs, it is essential to carefully weigh the pros and cons of buying versus renting. Your decision should consider not only the financial aspects but also the stability and long-term implications for your family. Any thoughts or feedback on this matter would be greatly appreciated.
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I think going from a sfh to a townhome with a growing family would be a poor choice.
Seems you could afford it, but not sure what buying a home would get you in your situation. In the short term you just end up paying more for less house to live in.
Do you have to be in So Cal? Is any portion of your work remote?
I left San Diego for Las Vegas last year, and with your income you can easily buy a house here. I work mostly remote with travel here in there, I go to California almost every week to meet with clients.
I would at least ask, if you don’t have to be in person.
I was in a very similar situation as you two years ago. My income was relative to the mortgage cost that you are encountering. During that time, I had to weight the risk and assessed the financial hole that I was going to go dig myself into. I ended up pulling the trigger and the situation turned out very well for me. My home is now worth significantly more, even though at that time, I overpay significantly to win the bid. My wife went back to work and we ended up adding the additional cost of daycare. It was pain and suffering for the last two years but we adjusted. Looking back now, the decision was the right move and worth it for us in the long run.
Is the plan to cash out RSUs everytime you recieve them and if so how much of that $80k would you actually pocket?
Also I dont get the point of paying more for less. I get there is this idea that you will build equity, the value will appreciate and you are locking in costs while rent will continue to increase but honestly $6500 not including maintenance compared to $4200 for considerably less home Id probably just keep renting.
As long as you are diligantly investing your savings you dont NEED a house to be financially secure.