Buy Versus Rent In Costa Mesa
Colin Delaney May 20, 2013
Colin Delaney May 20, 2013
At the moment, it is difficult to buy anything in Costa Mesa because we continue to have a significant inventory problem.
However, when inventory returns to more normal levels, it should still be a good time to buy. Let’s look at this infographic, and then compare Costa Mesa real estate rental/sales amounts:
What is true is that the average Costa Mesa real estate mortgage for owner-occupants is similar to that of the early 1970s when you consider time adjusted for inflation.
If you consider the average 3-bedroom home in Costa Mesa real estate right now, at about $550,000, and you put 20% down, your mortgage would be about $1975/month at today’s rates. Add insurance and property taxes and your monthly gets up to about $2575 per month. That same three-bedroom home would rent for about $2600 right now.
Seems like an even trade-off, but when you push your deductions back in when you write the property off of your annual taxes (the Mortgage Interest Deduction is still most folks' top tax write-off) you will come out considerably ahead when you buy. You should be able to lower your tax exposure by a good $20,000+ on these numbers after purchasing.
So it continues to make sense to buy Costa Mesa real estate. Will these numbers change? Probably not for some time. We will continue to see steady appreciation this year. Will it continue to rise at the 10% clip we have put on in the last six months? Probably not. If we added 3-4% this year then we have had an incredible run.
If you are planning on buying, what are the key factors to look for in Costa Mesa right now?
1. Location
2. Neighborhood
3. Type of property
4. Condition of Property
I will get into those ideas in another post because I think that regardless of how hot this market is right now, you have to maintain the fundamentals when buying a property in Costa Mesa.
Thinking of buying or selling? Call Colin to talk through your needs right now at (714) 743-9882 or e-mail me.
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Colin’s commitment to getting sellers top dollar and securing the best deals for buyers is backed by a proven track record and extensive local knowledge.
