Top 3 Reasons I’m Still Renting

HomeMy wife and I rent this cozy 2 bedroom apartment less than 3 miles from the beach in Los Angeles. It’s got a little yard and a garage with storage in the back as well.

Yes, we rent. And for 3 good reasons.

We said no to the 405

For anyone wondering what the heck is the 405 (pronounced “four oh five”), consider yourself lucky. The 405 is an evil stretch of interstate roadway on that. Though in reality, it’s an evil stretch of soul sucking traffic hell that sucks the life out of commuters morning and night.

Have you heard of Carmageddon? Did you also know that one of the most famous car chases in history was also one of the slowest because it was on the 405? Care to guess what celebrity car chase I’m talking about?

Here’s a snapshot of the LA traffic in a nutshell.

There’s green, orange, red, and dark red. Yes, Google traffic actually has to use shades of red to distinguish between bad traffic from insanely bad traffic.

A few years ago, my wife was working in downtown LA and had about a 16 mile commute each way. That doesn’t sound like much, but consider that with traffic between the beach to downtown LA it generally took up to 2-3 hours of daily commute time! Thankfully, she didn’t work there for too long.

There are only 24 hours in a day and we want to spend as much of that time together. So we’ve decided to always live near our work and minimize our commute.

By renting, we’re able to live close to the beach and to our jobs. Seriously, we both only have a 15 minute one way commute…let me repeat. 15 MINUTES! In LA!

Out of our Budget

Why didn’t we just buy a house in LA (but west of the 405) near our jobs then?

How about this one?

3 bedroom, 2 bath townhome 2.5 miles from the beach.

Okay so it’s not even a home, but let’s take this townhome that recently sold near the apartment that I rent. I emphasize townhome. It has attached walls, an HOA, and a backyard that would make people in the Mid-West laugh. This home, excuse me, I mean townhome, is nearly 3 miles from the beach so not on the beach, but near it. Care to take a guess of what it sold for?

Take a look below.


$980,000!!! Nearly a million dollars…for a townhome!

Sure there are other properties that can be found more cheaply, but you then have to sacrifice location. And if you’re considering to start a family, then the quality of schools become an important criteria as well. There are definitely properties in the $400k – $500k range further inland, but these are in much higher crime areas with very poor schools. Not to mention, we’d have to face the 405 on a daily basis.

Let me share with you all that my wife is an elementary school teacher and I’m just an engineer. No impressive salaries here. So even a townhome can be way out of budget for us.

Even if we could stretch our budget and squeak by with both our salaries, it’s important to consider what our financial situation may be in the future. In our case, we’re planning to have kids and when that happens, we may have to live off of just 1 salary. A safe guideline for affordability that I like to use is if we can afford it with just 1 salary, then it’s safely within our budget.

But I also want to Invest

Lastly, renting allows us to invest in rental property.

Instead of dropping our entire savings on the down payment of a townhome, I figured I can get a better return by investing my savings into rental property that would generate positive cash flow every month.

All the while keeping my living expenses lower because I wouldn’t have a high mortgage, property taxes, insurance, or HOA to pay every month due to the overpriced townhome. By keeping expenses lower, I’m able to save more every month, leaving even more to invest with.

In a future post I’ll go over a specific example of buying rental property to share some numbers instead of purchasing a personal residence.

So why do I rent again?

We choose to continue renting because of 3 reasons.

  1. Renting allows us to live near the beach, close to our jobs, and cuts down our commute time to a minimum.
  2. Buying in a location where we want to live is currently out of our budget.
  3. Renting keeps our monthly expenses down and allows me to invest in rental property instead.

The decision to rent or buy a home is a personal one and will depend on your financial circumstances, the market that you want to live in, and what your long term goals are.

Are you still renting? What are your top reasons for doing so?


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