Many people are looking for places to rent in Coachella Valley, I ask them why not buy? Many people assume that it is more affordable to rent when often times that simply isn’t true.
Let’s take a scenario like a $225,000 purchase price. You might ask, “Where can you get a decent home for $225,000?” and I’m happy to tell you that you can do so in Palm Desert Country Club, centrally located to everything the valley has to offer. It’s not gated (thankfully) and the annual HOA dues are currently $330.00 per year. And some of the streets have no HOA dues at all, like my listing on Kentucky Avenue.
There is a home on Michigan Drive that is currently being offered at $235,000. Since it’s been on the market for 774 days I’m assuming the seller is motivated. I’m also assuming (and you know what assuming does) that the seller would be willing to take $225,000. This home is on the golf course and it has an inground pool. It needs some work, but most homes do–even new construction.
Now, let’s assume a $225,000 purchase price, with FHA financing of 4% and 3.5% down payment:
Purchase Price of $225,000.00
3.5% Down payment of $7,875.00
Monthly Principal and Interest $1054.73
Monthly Property Taxes $234.38
Monthly Mortgage Insurance
(since your down is less than 20%) $153.80
Monthly Homeowners Insurance $65.63
Monthly HOA fees ($330 annually) $27.50
Total Monthly Payment: $1,536.04
So you see, if you qualify for this financing, it makes no sense to rent in this scenario. Your rent would likely be about $1500 per month, on the golf course, with a pool. And let’s not forget the mortgage interest tax deduction, which makes your annual net expenditures even more attractive.
In summary, if you are thinking about renting you should also think about buying and compare the two annual costs before you commit. Another benefit of homeownership is that you are your own landlord and no one is going to ask you to leave because they want to move back into the home or sell it.
In fact, if you want to take off for a few years, you can be a landlord and someone else can pay your mortgage while you’re traveling abroad, learning about new cultures and languages… It’s just a thought.
Contact me today to find out how YOU can become a homeowner rather than contributing to someone else’s retirement account.
Kelley Eling, Realtor
BRE License # 01336994