Jackie’s Advice: Renting Long-term Saves Big Bucks
Many moons ago – soon after I landed my first full-time gig as an editorial assistant for an astrological publisher – I plotted my escape from living at my mom’s house.
As you might imagine, working for a company that created horoscopes was a little wacky, but it paid just enough that, after diligently socking away money for several months, I could afford a deposit for a tiny studio in West L.A. My apartment resembled a large closet with an unsightly view of telephone lines and a freeway overpass, but it was a place I could call my own.
The decision to keep renting
Fast forward about 10 years later, and while I’ve upgraded to a slightly more spacious one-bedroom, I haven’t left the neighborhood. Though L.A. is among the least affordable rental markets in the U.S., with the average cost of rent for a one-bedroom apartment in the City of Angels soaring to over $2,000, I’ve decided to stick to my guns and remain a renter in L.A.
“YOU DON’T WANT TO STAY AT THE SAME LEVEL FOREVER, DO YOU?” MY MOM ASKS WHEN WE CHAT ON THE PHONE EVERY WEEK.
I can almost feel the wrinkles on her forehead multiply, see the look of concern on her face, as she asks me that. She is referring to me staying at my current apartment, which I’ve been in for the last few years. And although we’ve had this conversation a number of times, the fact is that I most likely will rent till the day I die.
Why is that? Well, for starters, I just can’t envision myself living in one place for, say, 10 or 15 years. While one could argue that you could rent out or sell a place if you owned it, the thought of managing a property exhausts me.
I mean, don’t get me wrong – it would be nice to own my own home. I do sometimes entertain fanciful notions of having a cozy craftsman of my own on a dreamy hillside in Silverlake. But those fantasies quickly dissipate after scenes from the film The Money Pit pop up in my head.
To me, a beautiful home is akin to having babies or owning pets: they’re something to adore or marvel at, but man, do they come with a hefty price tag.
When is buying smarter than renting?
The median price of a home in Los Angeles these days is just shy of $576,000.
I did the math, and in the 10 years that I’ve been renting, I’ve spent about $99,300. So what if I had opted to buy a home instead? If I bought a one-bedroom condo that was in the same neighborhood and that was somewhat comparable to the apartment I was living in a decade ago – and decided on a 30-year fixed mortgage with no money down – the amount I would’ve paid to-date would’ve been $222,670. (This includes maintenance and repairs, insurance, and taxes.) The total amount I’ve saved by renting? A cool $123,370.
Owning a home is a lot of work and a huge commitment. Even setting aside all that upkeep and maintenance that you are solely responsible for, you’re signing yourself up for a 15- or 30-year-long contract with your lender. Add regular installments to the bank, interest charges, insurance, taxes, repairs… I am already shaking.
I’m not a commitment-phobe, but I am gun-shy to sign up for something so long-term. If there’s anything that the Great Recession has taught us, it’s that our economy can be very rocky.
I love the fact that I could potentially give my 30-day notice to my landlord and move. Who knows? I might just want to move into the woods one day.
And as I look at the decade or so that I’ve been in the workforce, when it comes to material ownership, I have stayed at the same level, in many ways. I drive the same car that I had in college, and I haven’t made any drastic changes to my lifestyle. And to keep my housing costs low without roommates, I opted to stay in the more affordable part of West L.A.
Sticking it out as a renter
My friends and I have, in fact, batted around the idea of homeownership in our conversations – we are, after all, of the age when getting hitched and homesteading are norms. We have talked about how we would need to either purchase a home collectively or move to more affordable stomping grounds, but our discussions have never been very serious.
It’s just not a path that a lot of my friends – who are primarily artists and creative types – want to take. Instead of discussing the park view or the number of garages that our “owned” homes have, we talk about our personal endeavors, epic trips that we want to take, our community-building efforts; and the progress we’ve made intellectually, spiritually, or artistically.
And that, to me, is what “leveling up” in life is really about.