Time to say Good Buy
Six things you need to do before taking the plunge
By Jenny Lower
(1) Plan to stay put for the next Five years
It pays to be stable. Purchasing a house is a no-brainer as a long-term investment.
(2) Factor in the tax break
With deductions, a $3,000 mortgage payment could be reduced to $2,000.
(3) Do the research
Zillow, Redfin, and other real estate sites give you a sense of the market. Find an agent who specializes in first-timers.
(4) Rate your needs
You want an easy commute, great schools, and a
dog park. Make a short list of must-haves and stick to it.
(5) Have 20% ready for a down payment
It sounds overwhelming, but any amount less than that means you’ll need mortgage insurance, which runs an extra $200 to $300 per month. Over time, that adds up to more than if you’d saved and scrounged for the original chunk.
(6) Learn your limits
The whole enchilada—principal, interest, taxes, and insurance—shouldn’t exceed 45% to 50% of your income.
The monthly rent for a 1-Bedroom apartment in weho: $1,800
Here’s what that gets you in...
Portland, Oregon: A restored 1919 three-bedroom, two-bath house with two walk-in closets, a fireplace, rooftop cedar deck, and skylights.
Austin, Texas: A four-bedroom, four-bath home with a fireplace, two-car garage, and large yard.
Seattle, Washington: A three-bedroom, two-bath Tudor-style house with two parking spaces and a “mature” garden with a view of Mount Rainier.
New York City: A studio apartment with “tons of natural light.” Hot water included. (Maybe we don’t have it so bad after all.)
Our real estate pros predict L.A.’s up-and-coming addresses
Rent: $750 to $1,100 (Studio)
Redfin named this working-class pocket just west of the 110 freeway as its hottest neighborhood nationwide for 2013. Much like Echo Park did five years ago, the area is attracting hipster stalwarts—record stores and wine bars—to York Boulevard. The city council recently announced a pedestrian-friendly greening plan. Don’t expect this spot to stay cheap for long.
Rent: $1,000 to $1,200 (One-Bedroom)
The central location, plentiful restaurants, and revitalized downtown and arts district off Venice Boulevard have transformed a former bedroom community into a smart bet for young couples and creative professionals saving up for that future down payment. The lightrail zooms you downtown within 30 minutes; a Santa Monica stretch is due for completion in 2016.
Own: $600,000 to $835,000 (Two-Bedroom-Plus Home)
The Westside’s best-kept secret offers good schools, tree-lined streets, and a block-party community for families pushed southeast from Santa Monica and Brentwood. Many postwar homes are still in original condition, so you could find a deal. Generally an upscale three-bedroom with hardwood floors and modern kitchen and bath will run you up to the mid-$800s.
Is It Worth It?
Buying Or Building a Pool
Once a symbol of Los Angeles luxury, the chlorinated swimming hole is now a liability. The cost of maintenance, risk of injury (particularly with children), and general pain-in the-ass-ness can hurt your chances of selling a home. The au courant value-add is now native plant landscaping.
The Loan Ranger
Real estate specialist Josh Perelson lays out tips for newbies
Know the score
Having a FICO score of 740 or above is optimal for securing an interest rate of 3.75%.
Save your paychecks
A lender wants to see at least two years of consistent income if you’re self-employed. Otherwise you must prove your worth with pay stubs.
It will raise the ceiling for your available loan.
Borrow and beg
Plenty of buyers hit up family for a loan. Offer a lifetime of guest bed privileges.
The Discreet Aesthete
Collector Matt Jacobson shares how his passion for fine objects fits into his 900-square-foot beach cottage
As told to Jenny Lower
When you move to a smaller space, it helps you figure out what’s important. In order for me to buy something, it has to replace something I already have. It’s about finding the things that are inherently important to you and letting the superfluous stuff go. For instance, I don’t collect all of Raymond Pettibon’s work. I have a nice collection of his surf drawings. It’s better to stay focused.
Provenance and history are really important. I think of furniture as artwork, so I look at things I think are going to have long-term value. I think from a design standpoint. Who is the designer? Who is the manufacturer? Does it contextually work in the space? Is this an investment piece? It might take me a year to find it, but I’d rather have one great early Eames fiberglass shell chair than three not-so-great ones. These things have intrinsic value. If a piece doesn’t work, I’m going to be able to get rid of it. I know there’s a market for it.
It’s very cathartic to let go. Right now I feel complete. There’s nothing I’m looking for. There’s just serendipity if I find something great.
10%Estimated rent increase throughout L.A. county by 2014
3-D photo-illustratons by Comrad
Illustrations by Chris Gash