Neil Shekhter – NMS – Renting or Buying in Los Angeles?
LOS ANGELES, CA / ACCESSWIRE / May 20, 2018 / The final decision whether to rent or purchase a house will depend on savings done in advance.
Is it better to buy or rent in Los Angeles? Will rent save money at long run?
The cost of homes is very expensive, and the rental houses are hovering to a level that it is becoming costly especially to the residents. The people are wondering whether, it’s renting or buying, it’s not an easy choice.
In any decision they make, it always has its pros and cons, this is because for one to buy a house will need financial commitment which is very hard for many residents.
Make an assumption that you have some savings, what option is more sensible from finance perspective?
According to Neil Shekhter, there is no correct or wrong answer, all you need is to have thoughts about it.
There are guidance tools from Zillow and New York Times where Zillow calculator help to determine the BEP(Break-even point). It says that to purchase a house is better than renting because of the equity received by the owner after purchase.
This means that when you are paying for your home, the total value will increase especially when selling it. If you assume that rent and mortgage are equal, then buy a house. It will save in case the money you end up having is more than what you purchased, which is better than writing checks monthly to landlords.
A median house in Los Angeles averages $580,000 which is better than paying for it $2,000 monthly. It will only require sixty-seven months to hit the BEP. That means buying will pay off instead or renting. The calculation changes drastically when you buy pricier resident or getting a cheaper lease.
When following the same scenario, it will only require thirty-two months to break even when rental payment is $3,000 per month. In addition, if you decide to choose $580,000 home or maybe pay $1,500 monthly, then buying will never be cheaper for you.
Using the examples, it means that the buyers will agree to pay down payment of 20% to purchase a home worth $580,000 which will be $120,000.
The reason for the best option will depend on factors from the host. It depends on how many are having $120,000 just lying around. It will also depend on buyers saving or are they ready to engage in such heavy financial commitment.
It’s also an option to get a mortgage where you will not require down payment. This means that there will be heavy payments every month. It will, therefore, affect financial viability when purchasing because buyers have less capital from the get-go. When paid 5 – 10%, the homeowners will be left owing more than their home is worth.
Neil Shekhter stated that it won’t take much putting a hole in one’s balloon, but he later says that the required virtue at the moment is patience. It didn’t mean buyers need to stop going for open houses. The decision on whether to buy or purchase will entirely depend on what they are looking for in a home.
If you want to stay for more than five years, it’s better to buy because come ten years later, the prices will have gone very high more than today, explains Neil Shekhter, the chief executive officer of NMS Properties
NMS has offered quality rentals in the Los Angeles area for nearly three decades. Since 1988, NMS has developed and managed a large portfolio of premier apartment buildings and commercial properties in Santa Monica, West Los Angeles, Brentwood and the San Fernando Valley
Contact:
https://www.crunchbase.com/person/neil-shekhter
https://www.levo.com/neil-shekhter
https://twitter.com/neilshekhter1
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SOURCE: NMS Properties, Inc.
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