San Diego Buying vs. Renting – Pros and Cons
Buying versus Renting is a very personal decision. Such as in life, there are consequences to both actions.
If you are considering or tempted to buy due to all the available Bank-Owned Real Estate (REO) here in our San Diego County or all the bargains you have been hearing, the purpose of this article is to advise some pros and cons of buying a property versus renting.
First, here’s a brief snapshot of the San Diego Housing Market and San Diego Home Mortgage Market.
Alora Realty’s statistical analysis indicates that San Diego Real Estate Market began its nosedive around March thru July of 2008, depending on which communities you are considering. This was mainly due to negative amortization loans (Sub-Prime) lending that was out of control. As a result, short-sale and REO properties have soared bringing the price of entry into various communities to late 1990s/early 2000 pricing (not all but most).
Almost 3 years later, this trend is continuing in most communities in San Diego County. The chief economist from the National Association of Realtors or NAR has often associated San Diego as the canary in the mine in the real estate field.
If San Diego is the canary in the mine, then the canary is beginning to regain its conciseness.
The indication comes in two folds. First, pricing in certain areas are beginning to stabilize and the banks that have been holding “shadow inventories” are beginning to release previously held properties because the market is improving. Let’s keep in mind that existing today; there are hundreds of REO properties in the market.
As you’ve heard, the Fed interest rate is near zero percentage.
Does this mean you get a zero percent mortgage?
Answer is no but the Home Mortgage Rate has been the lowest in decades. Mostly it’s below 5 points depending on your credit.
Pros of Buying:
- Property Builds Equity
- Mortgage interest and property tax deduction every year
- Free to change decor and landscaping
- Not dependent on landlord to maintain property.
- You are responsible for maintenance
- You are responsible for property taxes
- Possibility of foreclosure and loss of equity
- Little or no responsibility for maintenance
- Easier to move
- No tax benefits
- No equity is built up
- No control over rent increases
- Possibility of eviction
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