Should you renew your lease in Los Feliz or put that money toward a mortgage this year? The decision is emotional and financial, especially in a neighborhood with character homes, older buildings, and strong rental demand. You want clarity on the real costs, the break-even timeline, and how long you should plan to hold before buying makes sense. This walkthrough gives you a step-by-step, numbers-first way to compare renting and buying in Los Feliz, plus a hypothetical example and simple scenarios you can adapt to your budget. Let’s dive in.
What drives Los Feliz costs
Los Feliz offers a mix of single-family homes, classic bungalows, small multifamily buildings, and condos. That variety affects price points, HOA fees, and maintenance expectations. Proximity to Griffith Park, walkable streets, views, and historic character often carry a premium.
The City of Los Angeles Rent Stabilization Ordinance applies to many multi-unit properties built before October 1978. Single-family homes, condos, and newer buildings are generally exempt. This matters for rent increase expectations and tenant rights, so verify a specific building before you decide.
On the ownership side, Proposition 13 limits assessed value growth for ongoing owners. Your property is reassessed at purchase, which becomes your new base. Expect supplemental tax assessments after closing and verify any special assessments. Earthquake risk is part of Los Angeles life, and many older Los Feliz homes predate retrofit standards. Earthquake insurance is commonly considered and adds to monthly cost.
The full cost checklist
Use this list to capture everything in your rent vs. buy comparison. The goal is to compare your actual monthly outlay and your total cost of occupancy over 1, 3, and 5 years.
Renting costs
- Monthly rent
- Renter’s insurance
- Utilities you pay directly
- Parking, pet, or amenity fees
- Security deposit and any nonrefundable fees
- Potential rent increases if the unit is not covered by RSO
One-time purchase costs
- Down payment (3 to 20 percent or more depending on loan type)
- Closing costs such as lender fees, title, escrow, and prepaid items
- Inspection, appraisal, and possible repair holdbacks
- Moving costs
Monthly ownership costs
- Mortgage principal and interest
- Property tax based on the new assessed value
- Homeowners insurance
- Private mortgage insurance if putting less than 20 percent down
- HOA dues for condos or homes in associations
- Utilities typically paid by owners
- Maintenance and repairs, which can be higher for older homes
- Reserve savings for big-ticket items like roof, HVAC, and seismic work
- Earthquake insurance if you choose to carry it
- Opportunity cost of your down payment and closing cash
Exit and long-horizon costs
- Listing and buyer agent commission paid by the seller
- Seller closing costs and any capital improvements
- Carrying costs and time-to-sell risk if the market softens
- Capital gains exclusion rules if you sell a primary residence
Tax outcomes depend on your situation. For precise advice on deductions and capital gains, consult a qualified tax professional.
How to compare the numbers
Build two views: monthly cash flow and total cost of occupancy for 1, 3, and 5 years. Here are the key steps and formulas so you can plug in your figures.
Step 1: Mortgage payment
- Formula: P&I = P × r × (1 + r)^n / [(1 + r)^n − 1]
- P = loan amount, r = monthly interest rate, n = total payments
Step 2: Property tax and insurance
- Property tax per month = purchase price × effective tax rate ÷ 12
- Homeowners insurance per month = annual premium ÷ 12
- Add earthquake insurance if you plan to carry it
Step 3: Other monthly items
- PMI if down payment is under 20 percent
- HOA dues if applicable
- Maintenance per month ≈ purchase price × annual maintenance percent ÷ 12
- Utilities difference versus renting
Step 4: Tax effects
- Estimate any incremental tax benefit from mortgage interest and property taxes relative to the standard deduction
- Subtract the estimated monthly tax benefit from ownership cost for a cash flow view
Step 5: Opportunity cost and transactions
- Opportunity cost per month = down payment × assumed after-tax return ÷ 12
- Amortize one-time costs across the holding period: total transaction costs ÷ holding months
Step 6: Compare and find break-even
- Monthly net ownership cost = P&I + taxes + insurance + PMI + HOA + maintenance + utilities − estimated tax benefit + opportunity cost + amortized transactions
- Break-even months = total one-time purchase and selling costs ÷ (monthly rent − monthly net ownership cost)
If net ownership is higher than rent, break-even may not occur within your horizon. If it is lower, you can estimate how long it takes to offset one-time costs.
HYPOTHETICAL example you can mirror
The numbers below are illustrative for a single-family purchase. Replace them with current Los Feliz prices, your quoted rate, and comparable rent.
- Purchase price: 1,200,000
- Down payment: 20 percent = 240,000
- Loan: 960,000 at 6.5 percent, 30-year fixed
- Monthly P&I using the formula above: about 6,069
- Property tax at 1.16 percent: yearly 13,920, monthly 1,160
- Homeowners insurance: annual 1,200, monthly 100
- Maintenance at 1 percent: annual 12,000, monthly 1,000
- HOA: 0 for a standalone home in this example
- PMI: 0 with 20 percent down
- Total monthly ownership before tax benefits: about 9,329
Transaction costs for the hold period:
- Estimated selling commission 5 percent plus 2 percent other closing costs = 7 percent total, or 84,000
- Amortized over 60 months for a 5-year hold: about 1,400 per month
How to use this example:
- Monthly net ownership cost before tax benefit and opportunity cost is roughly 9,329
- Add your estimated opportunity cost on the 240,000 down payment
- Add 1,400 per month to reflect transaction impact if you plan a 5-year hold
- Compare to your current or target rent for a similar home in Los Feliz
Break-even illustration:
- If your comparable rent is R per month and your net ownership cost is O per month, then monthly savings = R − O
- Break-even months = 84,000 ÷ (R − O) if O is less than R
This example is a starting point. If you are considering a condo, add HOA dues. If you plan for earthquake insurance, add that premium.
Three buyer scenarios to test
1) Conservative 1–3 year plan
- Rate assumption: use the high end of your lender quotes
- Appreciation: 0 to 1 percent per year
- Maintenance: budget toward the higher end for older homes
- Takeaway: transaction costs loom large, so renting may be attractive unless your rent is unusually high
2) Typical 3–7 year plan
- Balanced rate assumption with room for small refi risk reduction later
- Appreciation: modest, stress test at 0 to 3 percent
- Maintenance: 1 percent baseline, plus reserves for systems
- Takeaway: monthly parity and principal paydown can make buying reasonable
3) Long-term 7+ year plan
- Longer horizon reduces the monthly gap through amortization
- Appreciation uncertainty smooths out over time
- Upfront costs get diluted across more years
- Takeaway: buying often wins if you plan to hold and maintain prudently
Sensitivity checklist for your model
- Mortgage rate: test plus or minus 1 to 2 percent
- Down payment: 5, 10, and 20 percent options
- Home appreciation: negative 5 percent to positive 6 percent annually
- Maintenance: 1 to 2 percent of price, especially for older homes
- HOA dues: include actual ranges for Los Feliz condos
- Earthquake coverage: add the premium and deductible you are considering
Small changes in rate or maintenance can swing your monthly gap by hundreds of dollars. Run a few versions before you decide.
Local factors that matter
- RSO coverage: many pre-1978 multi-unit buildings are covered, which can shape rent increases. Verify a specific address if you rent now or plan to lease your property later.
- Proposition 13: your assessed value resets at purchase, and ongoing increases are capped for as long as you own. Factor in supplemental tax bills after closing.
- Earthquake risk: older Los Feliz homes may benefit from retrofit work. If you carry earthquake insurance, include that premium in your monthly model.
- HOA vs. single-family: condos bring shared maintenance and regular dues. Single-family homes bring more direct maintenance responsibility and potentially higher variability.
- Parking and site factors: tight blocks can affect both rent and resale desirability. Budget for improvements that aid functionality.
Prepare to buy in 6–12 months
Create a simple folder with the items below so you can run numbers now and move quickly when the right home hits the market.
Financial readiness checklist
- Recent credit report and score
- Pay stubs for the last two months and W-2s or 1099s
- If self-employed, last two years of tax returns
- Bank statements for the last two months that show down payment and reserves
- Current rent and your recurring debts
- Target timeline, desired property type, and clear deal-breakers
- Preferred down payment scenarios such as 5, 10, or 20 percent
What you will get on a strategy call
- Comparative monthly cost estimates across several price ranges and down payments
- Pre-qualification steps, documents, and a timeline to be under contract
- Search strategy for Los Feliz and adjacent areas that align with your budget
- A simple spreadsheet you can use to plug in rates, taxes, HOA, and rent
Work with a legal-grade, numbers-first partner
You deserve a clear plan, not guesswork. As an attorney, investor, and local Realtor, we model your scenarios, pressure-test assumptions, and negotiate with precision so you can move from lease renewal to keys with confidence. If you want a custom rent vs. buy run for Los Feliz, schedule a strategy call with Richard Evanns. We will map your 1, 3, and 5-year outcomes and outline a step-by-step path to purchase.
FAQs
What should Los Feliz renters include in a rent vs. buy model?
- Include rent, renter’s insurance, all ownership costs (mortgage, taxes, insurance, PMI, HOA, maintenance, utilities), opportunity cost, and transaction costs spread over your holding period.
How long should I plan to hold before buying makes sense in Los Feliz?
- Run 1, 3, and 5-year cases. Short holds amplify transaction costs, while 5+ year holds spread them out and benefit from principal paydown.
How does Proposition 13 change my long-term costs?
- Your assessed value resets to the purchase price at closing, then annual increases are capped, which can help stabilize long-term property taxes.
What is different about condos vs. houses in this calculation?
- Condos add HOA dues and shared maintenance, while houses shift more maintenance risk to you. Add HOA to monthly costs and keep a repair reserve for either.
How should I treat earthquake insurance in the model?
- If you plan to carry it, include the premium in monthly costs and consider the deductible in your reserve planning for a major event.
Do RSO rules affect my rent projections?
- Many pre-1978 multi-unit properties fall under RSO, which can limit certain rent increases. Units that are exempt may see more variability, so check your building.
What down payment should I target if I want parity with rent?
- Test 5, 10, and 20 percent options. Larger down payments reduce P&I and can remove PMI, but remember to include the opportunity cost of cash you tie up.
