Two homes on the same San Diego street. Both two bedrooms, two baths. One rents for $2,650 a month. No down payment, and when something breaks, the landlord fixes it.
The other costs $5,866 a month to own. You bring $66,900 to the table, and every repair is on you.
Which one would you choose? Everyone says renting is throwing money away. Right now, the math says otherwise. Let's break down the two bath, two bedroom scenario.
The Two Homes
The rental: a 2-bed, 2-bath apartment on Clairemont Drive in North Clairemont. About 1,000 square feet, listed at $2,650 a month after a $50 price cut. That's $22 under the San Diego median asking rent.
The purchase: a 2-bed, 2-bath condo on Clairemont Drive in Bay Park. 1,232 square feet, a Mission Bay view off the patio and a two-car garage, listed at $669,000. That's right at the September median for condos and townhomes across San Diego.
What It Costs to Own
Start with the rate. The 30-year fixed sits at 7.37%, per Mortgage News Daily. Over the past year it ran as low as 5.99% and as high as 7.61%, so today's rate sits near the top of that range.
Put 10% down, that's $66,900, and finance the rest. Here's the full monthly payment.
| Monthly cost | Amount |
|---|---|
| Principal and interest ($602,100 loan) | $4,157 |
| HOA | $601 |
| Property taxes (estimate) | $697 |
| Homeowners insurance | $120 |
| Mortgage insurance (estimate, mid-700s credit) | $291 |
| Total to own | $5,866 |
| Rent up the street | $2,650 |
Mortgage insurance applies because the buyer puts less than 20% down. It protects the lender, not you.
That's a gap of about $3,216 a month. Owning costs more than twice what renting does, for the same two bedrooms and two baths. The condo is about 230 square feet bigger and comes with a garage. It's still not close. On monthly cost alone, renting wins.
So Is Renting the Better Decision?
It depends. And of course, you would think that as a Realtor, I'm going to tell you to buy. Fair enough. Look at the numbers with me, because there's a real case in either direction.
At 7.37%, most of that loan payment goes to interest. But waiting for rates to drop has a catch. When rates come down, every buyer on the sidelines jumps back in at the same time, and that competition pushes prices up.
In exchange for today's higher rate, owning gives you things renting never will. Possible tax benefits, like deducting mortgage interest and property taxes, depending on your situation. A payment that pays down your loan every month, so your equity grows. A home that's yours to improve. And a 30-year loan started sooner ends sooner, which shapes when you retire and how comfortably.
Ten Years Out
I ran both paths ten years forward, assuming rates never drop and the owner never refinances.
The owner. Say the condo appreciates 6% a year. That's an assumption, not a promise. In ten years it's worth about $1.2 million, and the loan drops to about $521,000. That leaves roughly $677,000 in equity.
The renter. Instead of putting $66,900 down, the renter invests it. Every month, the renter also invests the $3,216 difference in a broad stock market index fund. At an assumed 8% a year, that account reaches about $737,000.
On paper, the renter comes out about $60,000 ahead. That's closer than most people expect.
What the Math Leaves Out
The owner's number leaves out tax deductions along the way and the cost of selling. The renter's number assumes rent never rises for ten straight years. In real life, rent goes up while a fixed mortgage payment stays put.
And most people don't invest the gap every single month. Vacations happen. Cars break down. That money gets spent, not invested. That's where owning wins. It forces you to save, into one of the most valuable things you'll ever own.
There's a case to be made for either path. Whichever way you go, make the move from a position of financial strength.
Watch the Full Video
This post covers the rent-versus-buy math. The full video goes further. I walk through San Diego's September rent report, where landlords are offering free months and waived fees, why some local rentals are sitting empty for months, and what renters and landlords should do right now.
Watch the full video on YouTube
Thoughts, questions, concerns, don’t hesitate to reach out.
As always, I’m Karl Kyler, your San Diego Realtor.
Karl Kyler · Karl San Diego
eXp Realty of Southern California, Inc.
KarlSanDiego.com · 619-829-2908
DRE #01439839