Chi Lee’s Real Estate Column – Buy vs. Rent

Should I Rent or Buy a House in San Diego County?

There are many things that need to be considered when deciding whether to rent or buy a property. Some of the things you need to consider are cash flow, the local market, the interest rate, tax deductions, and your life style. Below is a list of elements that you should consider when deciding whether to buy or rent a home in San Diego.

Monthly Budget

The first item you should consider is your monthly income. You should breakdown your gross monthly income and deduct your monthly expenses. As a rule of thumb, your monthly housing expense should be about 30% of your gross monthly income.

Financial Consideration

The price of the home is not the only financial consideration you should have. The interest rate plays a crucial role in determining the price you will pay. Interest rates as of June 2018, have increased about 1% in comparison to a year ago. However, interest rates are still at a historical low. For example, interest rates were over 14% in the 80’s and over 7% in the 90’s.

Years in San Diego 

The longer you plan to live in San Diego, the more it makes sense to buy a house.  A study done by Zillow in 2018, notes that it makes economical sense to buy a house in San Diego if you plan to live or own the property for more than 3 years and 4 months.

Opportunity Cost

There are opportunity costs associated with buying a house. When buying a house, you must come up with the down payment, loan origination costs, and closing costs. You could use this money in other investment opportunities such as the stock market. However, there are not many investment opportunities that can leverage your money 5 or 10 times with the power of borrowing.

Life Style

There are people who do not want the responsibility of owning a house.  As you live in the house there will be things that need to be fixed. As a renter, you just need to ask your landlord to fix the broken item. On the other hand, renters cannot change the house without the landlord’s permission even if they wanted to.

There is also a psychological component of owning a house. Homeowners are not worried about being kicked out by the landlord or the rent being raised. There is an intangible value in the assurance that home ownership brings.

Finally, everybody has different priorities in terms of home ownership. Like any decision, it is most important to make sure that our decision is aligned with our priorities.


Chi Lee (858.354.9215);


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