This is part two B of a three 1/2 part series on Moving to a New City. I’ve narrowed down my search to four cities in California I’d like to research further before visiting them individually. I realized that before I could actually visit each city, I needed to compare prices for renting vs. buying property in each city.
A recap of the cities I intend to visit over the next few months:
- Roseville, CA – closest metro is Sacramento.
- Concord, CA – closest metro is San Francisco
- Ventura, CA – closest metro is Los Angeles
- Atascadero, CA -closest metro is San Luis Obispo (but I wouldn’t consider this an actual metro – this city is most remote in comparison to the others.)
Since Ventura and Atascadero are within driving distance of where I currently live, these two cities are first on my agenda. Using Zillow.com to compare rental prices with home sales, I notice that it might be better to purchase a house rather than rent. Below is my analysis:
Prices in Ventura have decreased quite a bit compared to home prices a few years ago, yet homes still hover around $350K -$450K. I’ve actually visited Ventura before and really like the ‘old’ downtown area. Unfortunately, rentals are few and far between in the downtown area and home prices are out of my price range ($650K and up). However, a few short miles southeast, not far from the shore, I found an adorable rental home and a quaint house for sale:
According to Michael Bluejay’s calculator, buying a house for $415,000 compared to renting for $1,950 would be profitable in year 7 of home ownership. However, my monthly mortgage payments would be approximately $3,000 per month with a 10% down payment. That’s $1,050 more per month in mortgage than in rent! Could I even make that much of a monthly payment? I don’t know – it would be a stretch. Guess I need to stick to homes in the mid-$300’s! Fixer-upper here I come.
Atascadero is about a 3-hour drive north of where I currently live. I’ve never visited this area before, so using Zillow.com to hunt down appropriate properties was a little tricky, especially since house prices range from high $100K to $900K – that’s a huge difference in prices. There are also few rentals listed on Zillow in this area, making it more difficult to compare. Atascadero appears quite mountainous, which would make biking around challenging – a potential drawback to this city.
I found two properties within a couple of miles from each other -one for rent and the other for purchase. According to my calculations, buying would be more profitable after year 5. There are a few homes under $300,000, but until I visit the city myself, I have no idea why there is such a huge price range between homes. I might need to look a little bit north in the town of Paso Robles, CA. It’s about 10 miles north and has less expensive properties. I also found some really quaint photos of their historic downtown area that piqued my interest. The area also seemed a bit less hilly, meaning it’s better for bicycling.
Within the next few weeks, my plan is to physically visit these two/three cities; bike around, check out properties, get the ‘feel’ of each city. Stay tuned….