Rent or Buy? That is the question. (San Diego: sale, real estate market)

[robrelo]

So the wife and I have decided to move back to SoCal. We are not 100% sure where at this point, but the big decision is to rent or buy. We've lived in SoCal for 30 years prior to leaving for Colorado in 2009, but she wants to be close to the kids, and the snow gets old. In any case, we need to figure out whether to buy or rent right now. We have talked about doing an Airbnb for a few months to live near the area we are looking at, and then have our stuff moved out (PODS) once we have purchased a home.

The current real estate market has us concerned, mainly because we don't know if the frenzy in buying is going to be a mirage in 12 months or not. We are concerned that we might be buying at a serious peak.

There's also the issue of the debasement of the currency. A bit concerned to have our real estate funds (from the sale of our current home) tied up in cash. Having a tangible asset right now seems safer.

What do you guys think?

Thanks!

[Racer46]

Originally Posted by robrelo

So the wife and I have decided to move back to SoCal. We are not 100% sure where at this point, but the big decision is to rent or buy. We've lived in SoCal for 30 years prior to leaving for Colorado in 2009, but she wants to be close to the kids, and the snow gets old. In any case, we need to figure out whether to buy or rent right now. We have talked about doing an Airbnb for a few months to live near the area we are looking at, and then have our stuff moved out (PODS) once we have purchased a home.

The current real estate market has us concerned, mainly because we don't know if the frenzy in buying is going to be a mirage in 12 months or not. We are concerned that we might be buying at a serious peak.

There's also the issue of the debasement of the currency. A bit concerned to have our real estate funds (from the sale of our current home) tied up in cash. Having a tangible asset right now seems safer.

What do you guys think?

Thanks!

Stay in an Airbnb and find the are you want. Then buy.



If the prices go up or down it does not change anything until you want to sell. This is assuming you plan on staying there for years. The inflation issue will harm the cash for sure but the housing value will suffer also even if it goes up in value. Again planning to stay there for years makes that issue meaningless, as long as you have an income that is sufficient. Still better than renting as that money is gone. One home I bought in CA years ago I sold when the market was dropping, but ... I still sold it for about 40% more than I paid for it even after deducting the pool and multiple patios, brick work, landscaping, etc. I had installed.

[roadwarrior101]

I wouldn't buy unless it were a place I was planning on owning for at least 5 years. You never can time the market well and all things equal, the closing costs on the home will take a while to make a positive ROI. If you plan to live in the house or rent it out, might make sense to buy now.

[GuitarDaver]

It's a seller's market right now, at least in San Diego.
Don't ask me how I know...

[Mr5150]

Rent: you are paying for someone else’s mortgage with nothing to show for it. Rental increases at the whim of the landlord. For people who can’t afford to buy or lack the long view. Usually more expensive on a monthly basis than a mortgage payment

Buy: you are paying your own mortgage with plenty to show for it. Fixed payments, no increase, ever. Called an investment.

[FSF]

As a general rule, if I'm moving to a new area and don't know whether I want to buy or rent, I would think renting would be the wiser course of action.

[FSF]

Originally Posted by Mr5150

Rent: you are paying for someone else’s mortgage with nothing to show for it. Rental increases at the whim of the landlord. For people who can’t afford to buy or lack the long view. Usually more expensive on a monthly basis than a mortgage payment

Buy: you are paying your own mortgage with plenty to show for it. Fixed payments, no increase, ever. Called an investment.

It all depends on the numbers. There are endless examples of renting being better than buying. There are endless examples of properties where AFTER paying 20% down payment, you will STILL be cash flow negative, often by a big chunk.


To use an approximate example that exists in many places, would you rather pay $1800 a month to rent or $450K to buy that place and deal with all of the ownership costs and maintenance requirements? As someone who owns property, has played landlord and can afford to buy in just about any market, I would take the rent option all day long.

[Racer46]

Originally Posted by FSF

It all depends on the numbers. There are endless examples of renting being better than buying. There are endless examples of properties where AFTER paying 20% down payment, you will STILL be cash flow negative, often by a big chunk.


To use an approximate example that exists in many places, would you rather pay $1800 a month to rent or $450K to buy that place and deal with all of the ownership costs and maintenance requirements? As someone who owns property, has played landlord and can afford to buy in just about any market, I would take the rent option all day long.

As someone who has rented and bought in CA and can pay cash for any house I want. Once I knew where I wanted to live, buying is best.


Now buying to rent is totally different than buying only your residence.

[FSF]

Originally Posted by Racer46

As someone who has rented and bought in CA and can pay cash for any house I want. Once I knew where I wanted to live, buying is best.


Now buying to rent is totally different than buying only your residence.

That's a personal preference, not a choice derived from deductive reasoning. These are people with budgets, I presume, and they have to consider a myriad of factors in making these decisions. I get that the majority of owners, especially those who can pay in cash, are going to want to own under virtually all reasonable circumstances. But this isn't about what you specifically would do but what the OP should do. I understand that you are just giving your opinion of what you would do but if your circumstances are markedly different, then the opinion is not only unhelpful, but even perhaps detrimental.



It doesn't seem that clear to me that the OP knows exactly where they want to live. It's problem rushing in to buy if that is the case, even by your own opinion.

[Electrician4you]

Keep your house in Colorado.

Move out here and rent where you think you wanna live. Start looking. Of you feel the area is what you want and want to relocate then sell the house in Colorado a d buy out here.
If you rent for a year you’ll have the luxury of taking your time to look, still have a house if the California Dreaming turns to California Nightmare and your can move back.


If I was moving to a different state I would rent first check the area out and then decide if I want to move. O rather rent for a year than buy and sell because I hate it. Yeah I’m paying the LL and I gotta deal with living in a rental but it’s strictly a temporary thing. I’m not gonna rent forever.