Marina Del Rey rentals can be from about $2,500.00 to $10,000.00 per month. Depending on inland and seaside locations and age rental unit age. For some renters renting is practical. For others, renters buying a home makes the most sense. Marina Del Rey Renter Buy Home Rents Going Thru Roof?
Marina Del Rey Renter Buying Home Rents Going Thru Roof?
Purchasing a Home:
To purchase home buyers must have a down payment. Conventional loans require 10% to 20% down. With 10% down payment, the loan maximum is $636,150.00. Therefore, sales price maximum is $706,833.00. Down payment, less than 20% require private mortgage insurance. Loan amount exceeding will require 20% down payment. FHA requires only 3.5% but loan amounts are limited. Homeowners must consider principal, interest, property taxes and home insurance. Marina Del Rey Renter Buying Home Rents Going Thru Roof? Calculate Monthly Payments
Note: Condominiums, townhouses, and lofts are PUD’s. There is an additional homeowner association monthly fee.
- Loan Payments. Mortgage monthly principal and interest payments. These payments due for the life of the loan. Life of loan can be from 15 or 30 years. Fixed rate or adjustable mortgages are available. Fixed rate payment remain constant for the life of the loan. Adjustable-rate mortgage interest rate tied to an index. Monthly payments can vary based on index changes.
- Los Angeles property tax rate is 1.25% of property sales price. Taxes are due twice per year (Dec 10 and April 10) – the fiscal tax year runs from July 1 – June 30.
- Homeowners Insurance. It is mandatory to have homeowner’s insurance in California. The insurance covers potential catastrophic & events.The average homeowner’s insurance varies based on home’s appraised value. Earthquake is an additional policy. Not included in standard homeowner’s insurance. Check with your insurance company for quotes.
- Private Mortgage Insurance. If your down payment is less than 20% you will be required to pay private mortgage insurance (PMI). Insurance protects the lender from financial loss if the home is foreclosed or sold at discount to the existing mortgage amount. Generally, lenders allow PMI cancellation once homes value reaches 80%.
- Condominiums, Townhouses, Lofts (planned unit development) are subject to homeowners association monthly dues.
- Utilities. Homeowners are responsible for paying utilities, local services, cable, trash, the internet and etc.
- Maintenance. Homeowners are responsible for maintaining their home. This includes the interior and exterior. You’re responsible for all home maintenance and upkeep costs. Examples, appliances, roof, windows, flooring, painting, etc. Responsible for gardening expenses. A good rule is to expect 1% of home value per year for maintenance.
- Marina Del Rey Renter Buying Home Rents Going Thru Roof? Rents increase annually. Home purchase with fixed mortgage rate determines housing payments for next 15 to 30 years.
Estimated Cost of Home Ownership
Owning a home is a 15 or 30-year mortgage commitment. Are you ready to pick a real estate agent? Are you up to pick appliances and window treatments. Can you dedicate your time to finding a desirable, affordable neighborhood? Homeownership requires maintaining your home. Some weekends maybe devoted to gardening, cleaning the driveway and garage. Taking care of your most valuable asset take elbow grease. Home ownership is financially and emotionally gratifying. Marina Del Rey Home Buyer Tips
Monthly Rent: Renting there is only one amount paid monthly. Los Angeles is under rent control. In 2016 the maximum amount of the annual increase was 03%. Rental units built after 1979 are not under rent control. Marina Del Rey Renter Buying Home Rents Going Thru Roof?
Move in Costs: Rental moving in costs one month rent and a security deposit. Generally, the security deposit is equal to first month’s rent.
Pet Security Deposit: Security deposit for pet. Pet security deposit may or may not be refundable.
Renter’s Insurance: Optional insurance renter protected against losses due to theft, fire or other perils.
Maintenance: Landlord required to repair/replace infrastructure of the property being rented. Examples, lighting, heat, plumbing, appliances and etc.
Utilities: Depending on the written rental agreement. Landlord or renter will be responsible for all utilities, cable, and internet. In most cases, the renter is responsible for all utilities.
Advantages of Buying A Home
1. Building Equity Over Time
Purchasing a home a long-term investment. Generally 7 to 10 years. Homeowners build equity over time. Each monthly payment goes toward interest and principle. Every dollar going toward principal is a dollar in equity. Representing home ownership. Check amortization schedule shown above.
Home improvement can increase home values. Always replace leaky roofs. Maintain and or replace plumbing and electrical. If a home in standard condition over time consider updating kitchens and baths. A well-kept home and updates always increase home value. Marina Del Rey Renter Buying Home Rents Going Thru Roof? As a homeowner, you are building equity. Paying rent each dollar goes to the homeowner. Homeowners reap benefits of equity build-up.
2. Tax Benefits
- Federal Tax Deductions. Homeowners Itemize property taxes and interest are federal income tax write-offs. These write-offs reduce the homeowner’s tax bracket. These write-offs are benefits in reducing the homeowner’s tax bracket. Federal tax write-offs property taxes and interest. These tax benefits aren’t available to renters.
2017 Federal Tax Bill (goes into effect 01/01/2018)
Mortgage Interest Deduction has been lowered.
- Previously the mortgage interest deduction maximum was $1,000,000.00. In the new tax bill, the cap has been reduced to $750,000.00. The $750,000.00 cap applies to primary homes and second home. Existing loans as of December 15, 2017, will not be affected. As Home purchase must close by April 1, 2018.
- Deductible home equity loan interest: Deductions for home equity indebtedness is repealed. Tax law through 2017 you could deduct interest on up to $100,00 of home equity debt.
In 2017 homeowners could deduct state, local property taxes, income, and sales taxes from their federal tax returns. There were no limits on deduction amounts. This is no longer allowed. Now the maximum tax deduction allowed is $10,000.00. This could have a tremendous effect on California homeowner’s tax bill. Examples: sale price $1,000,000 property taxes $12,500.00 per year. Sales price $1,500,000.00 property tax $1,875,000.00. Previous tax code allowed total amount of property taxes to be written-off. Currently, $10,000.00 is total tax deduction allowed on state, local property taxes, income and sales taxes.
Losses sustained due to earthquake, fire, storm or theft that were not covered by an insurance company were tax deductible. Losses had to exceed 10% of adjusted gross income. The new tax law makes claims only valid if disaster declared an official national disaster. Victims of California wildfire are potentially eligible while victims of a random house fire are disqualified.
3. Potential for Rental Income
A new trend is homeowners renting their homes. Find this with long-term homeowners. They are finding that the rental income exceeds the current home expenses (PITI). Home can be turned into a source of income. Even if you don’t initially think of your home as an investment property. Your home can become a source of income. Marina Del Rey Renter Buying Home Rents Going Thru Roof. As a landlord, you can reap benefits of high rents.Homeowners owners are renting out part or all of their property. Homeowners must adhere to local laws Airbnb, VRBO,
- We take these low mortgage interest rates for granted. Consider in 2009 rates were five percent. In 2007 rates were six percent. In the 1980’s mortgage rates were double digits. Prospective home buyers take advantage of these low-interest rates. Lower mortgage rates five the buyer greater purchasing power.
5. More Creative Freedom
As a homeowner you are free. You own it make the improvements you want. Paint walls, change fixtures, cabinetry, lighting. Update kitchen and bathrooms. May want to just renovate the whole house. You own it!
Disadvantages of Buying A Home
1. Potential for Financial Loss
In 2008 the United States saw the “Great Recession.” Home values drop 20% to 40% depending on the area. In 2013 home values rebound. In 2017 values have regained 2007 values. In some areas, home values are at an all-time high. Home buyers realize home ownership is a long-term investment. If home values drop or flat-line it will decrease the appraised value of your home. Homeowners risk is a financial loss when they sell their home. Home ownership is an appreciating or depreciating asset.
2. Responsibility for Maintenance and Repairs
Uninsured maintenance is the responsibility of the homeowner. Homeowners can expect to pay about 01% annually for home maintenance. Maintenance of the home is owner occupied is not a Federal Tax Write-off.
- High Upfront Costs
Purchasing a home requires a down payment. FHA 3.5%, conventional 10% to 20% of sales price. Depending on the mortgage loan amount. By contrast, renters only pay the first month rent and security deposit.
Advantages of Renting
1. No Responsibility for Maintenance or Repairs
Renters are not responsible for home’s maintenance repair/replacement costs. If the water heater leaks, oven does not work it is the landlord’s problem. Renters do not have to pay for the repairs the landlord does. What I have noticed as a real estate agent is that renters are lucky to have a responsible landlord. Many times some items are not repaired/replaced. If they are repaired/replaced it is not correct. It is what you can call bandage repairs.
2. Relocating Is Easier
When job relocating rent is easier. In most cases affordable. Conversely, selling a home will take time. If selling your home is time sensitive homeowner may be forced to take a lower price. Resulting in an investment loss.
3. Economic Conditions
Home values fluctuate in response to changing economic conditions. Home values can decline over time. If you’re a renter, that’s not your problem – it’s your landlord’s.
4. Credit Requirements Generally Less Strict
Landlords require potential renters to provide a credit report. A credit report provides credit score and history. Landlord will consider a checkered credit history with substantial security deposit. Conversely, mortgage lenders have must higher credit standards.
5. Some Utilities May Be Included
Some utilities may be included. Large complexes outside lighting, amenities, cable, and trash.
Disadvantages of Renting
1. No Equity Building
As a renter, you are not building any equity. The property’s value is the benefit of the homeowner. Every cent paid is gone forever. There is not tax benefits or equity build-up. If considering staying in an area for several years buying maybe the best choice. You like the Marina Del Rey lifestyle. There is a problem you cannot afford to purchase a home or condominium in Marina Del Rey. Consider more affordable surrounding areas. As a first-time buyer, you may want a home. But you can only afford a condominium in another area. As a home buyer based on finances, most potential buyers have to be flexible.
2. No Federal Tax Benefits
Homeowners are able to deduct property taxes and mortgage interest on their federal tax returns. Therefore, reducing their tax bracket. Renters have NO tax deductions.
3. Rent Control – No Rent Control
Renters are aware of Los Angeles annual rent increases under rent control. Home built before October 1978 are under Los Angeles rent control. Marina Del Rey has a lot of newer constructed apartment built after 1979 not under rent control. Renters how much higher will your rent increase?Marina Del Rey Renter Ready To Buy Home Rents Going Thru Roof.
Marina Del Rey Renter Buy Home Rents Going Thru Roof? Marina Del Rey renters buying a home is not for everyone. Where you live is a lifestyle. You love Marina Del Rey but realize renting is not financially beneficial. Property is an asset. Renters do not own where they live. Every dollar you pay for rent goes to the landlord.Renters are not building any equity. The landlord is building equity. This applies to large complexes as well. The advantages of renting are the upfront costs. Renters only have to pay first months rent and a security deposit. What has reduced potential home buyers are required down payment and housing affordability. FHA financing requires 3.5% down payment. Conventional financing requires 10% to 20 % down payment. Say you have the down payment but West Los Angeles and Beach Cities is not affordable. Strongly suggest if sincere buyer consider surrounding affordable areas. Maybe able to get the area you want but condominiums are more affordable than single-family homes. Owning a home is an “American Dream.” You can calculate what makes the most financial sense for you and your family. Financial decision aside there are emotional decisions to be made. Keep an open mind. Only you and your family can make the ultimate decision to rent or buy home. Marina Del Rey Renter Buy Home Rents Going Thru Roof.