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Tuesday, August 16, 2011

Cheaper to rent than to buy condo in L.A.

Especially, if you add the HOA fees to your mortgage, property taxes, and most lenders now require a condo insurance.
Despite the steep drop in housing prices, it still makes sense for many Angelenos to rent rather than buy, according to an analysis by real estate website Trulia.
Trulia calculated a ratio that compared the median list price of two-bedroom condos with the median rental cost of similarly sized apartments.
It’s cheaper to buy in cities with ratios of 15 to 1 or less, and cheaper to rent in cities with ratios of 21 to 1 or more, according to Trulia. It’s generally cheaper to rent in cities with 16-1 to 20-1 ratios, although in some situations it could make financial sense to buy. In Los Angeles, the ratio was 19 to 1.
More of the bubble waiting to pop.
Read it all

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