Saving Money Through Leasing

Crunching The Numbers

The median price for a home in Los Angeles is well over $500,000. In Ohio, it’s $162k. If you’re making $30k a year after taxes in Ohio, and budget such that half your income goes to your home, you’re paying $1,250 a month, and before interest, your home is paid off in eleven years.

You could buy at 20 and own the property by 31. It would involve living modestly for a time, but at the end of that time, you could sell the property, invest in a better home, and actually see profit. If you’ve done home remodeling, property value can expand, or be maintained.

At the same rate in L.A., before interest, it would actually take you more than 33 years to pay it off, and the property you owned by the end of that time wouldn’t be worth near what you paid for it. There’s a housing crisis in L.A. which is silhouetted in tax, bureaucracy, political issues and inflation. A massive homeless population steadily erodes the value of communities even as poverty grows almost exponentially.

Unless you buy in a neighborhood that you know is going to retain value for thirty years, you’re going to lose tens or hundreds of thousands of dollars. Meanwhile, if you rent, you can climb the corporate ladder such that you’re able to buy-in on a property with a larger down payment, and have the ability to sell it at profit should the market go sideways on you.

The Buzz On Denver

You might look at a place like Denver. It’s centrally located in the country, and has a lot of hot industry right now. L.A. has opportunities on the “back end” of the economy. Short-selling stock is basically betting against its success, and the same kind of thinking can bring prosperity to savvy individuals seeking hidden profit in California. But in Denver, Colorado, many are migrating from California owing to multiple factors.

There’s a lot of industry in Colorado in the new Cannabis market. Technology startups have begun to spring up all over the place, there are media endeavors becoming more national, there’s fine tourism, and plenty of nature. What may make sense is finding an apartment in this thriving community, and a career niche which expands such that it allows you to save resources even on top of rent.

Colab offers student living solutions for those who are on the brink of finding the most appropriate career, and you can find all the details here. For a more cosmopolitan option, you might check out The Henry, which is an apartment complex that is centrally located and luxuriously designed. You can get started here on The Henry.

There are other living options available as well which could be even cheaper, but will be less reliable. Van-dwelling has taken off because it’s affordable and allows for asset retention; but it’s also a hard way to live, you’re always at the edge of having an interaction with law enforcement, and repairs can really be a hassle. Still, it’s an option.

Considering The Bigger Picture

Rather than sink money for years on end into a property whose value declines even after you’ve initiated remodel, you might want to spend some time finding the right career. Figure out what kind of work is going to keep you going, then “build your estate”, as it were. Apartment living is ideal in growing and declining markets where housing is difficult to predict, and buffeted by bubbles.

What you’ll want to do is consider your existing options and resources, then project a pragmatic expansion described by your career trajectory. How much will you be making in ten years? How are you going to get there? The future is impossible to predict, but if you make preparations for a desired goal, you can see your plans come to fruition.

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Author: James McQuiston

Ph.D. in Political Science, Kent State University. I have been the editor at NeuFutur / since I was 15. Looking for new staff members all the time; email me if you are interested. Thanks!

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