Permanent Vacation – Buying Apartment Los Angeles! Simple Explanation of Steps, Advantages, etc.
L.A., how to buy an apartment in Los Angeles. This is what we tell you about in this easy to read guide. Even if you know nothing about real estate, investing, or finances, we’ll tell you verything you need to know. Buying an apartment is a great investment, and if you’re renting, it’s a way to stop throwing money out the window every month. Let us take you through our guide on buying an apartment in L.A. Our friends at Lukinski have written this guest article
- Real Estate Los Angeles by Lukinski.
Buying an Apartment in L.A. – Vacation Vibe at Home
The place where your favourite celebrity probably lives… or at least has a three story luxury apartment. You want to live in the sun, meet celebrities on your way to grocery shopping, and not to forget, Hollywood, Bel-Air and Beverly Hills. On top of that, Los Angeles has everything else you need. Fashion, mountains, surf, the best bars and clubs in the world, and everything else.
Why Buy an Apartment?
Buying an apartment is almost certainly a good investment. Imagine you visit L.A., and instead of booking a room, you just need to remember to bring the key. To your own apartment! a place that you can decorate how you want, where you know your neighbors, and without worry, invite your friends over for a party.
Downtown – Where things Happen in L.A.
Want to be close to the action? Downtown L.A. is one of the most desired places to live in the city of angels. The price of this beautiful apartment? A strong $12 mil. This exclusive penthouse is in the Ritz-Carlton, and does not shy away from expense. This multi-million dollar piece of luxury will have you feeling like a superstar, with sleek design and top-level appliances. Look at those views!
- Price: $12 mil.
Why Should I Buy in Los Angeles?
Buying an apartment in Los Angeles has more advantages than we can name here. Apart from the endless leisure opportunities from nature in the form of ocean, mountains, and forests, you have fashion shows, some of the world’s best shopping, museums, movie stars, etc. The advantages continue though, because right now is the right time to buy in L.A. Rent is comparably high, and the city is so popular that it is very unlikely that values reduce.
Hollywood, High-Tech, and Industry
You may think of Los Angeles only as a town of movie-making rich-people. It may be surprising then to hear that it is also a premier destination for high-tech startups. With Silicon Valley and San Francisco so close, these companies prefer Los Angeles. It’s also home to some massive industry, as well as a financial metropolis.
- Population: 4,0 mil.
The Beauty of the City – Drone over L.A.
Los Angeles is also considered one of the most beautiful cities to live. You find endless beautiful suburban, inner-city, and palm-lined neighbourhoods. Sunsets at Venice Beach or a cocktail in your Bel-Air mansion? Why not. Take a look at how beautiful L.A. can be:
Why should I Buy an Apartment?
Because it’s a financially responsible decision, which you’re going to have fun with! Those are the two top reasons why you should buy an apartment. The financially responsible part will be explained later on, but when you hear ‘investing in real estate’ you never really think about the fact that real estate means you buy a place to live. Buying an apartment in L.A. therefore means not only being the owner of something which is gaining value over time (the way it does when you invest in other things like stocks), but also having your own luxury apartment in one of the world’s most desired cities. No more waiting in hotel lobbies, or booking a room in advance!
- Make money off your investment
- Have fun with your investment!
Where do I start with Buying an Apartment?
Maybe you’re not fully convinced yet. Even if you are, let me sweeten the deal. If you think about it, buying an apartment isn’t more expensive than renting it. That’s because when you buy an apartment, you will typically take out a loan (or mortgage, in real estate lingo, more on that further down), and pay off a bit of it each month. If you’re thinking, that sounds a lot like renting it, you’re right. The only big difference is that, when you’re paying off the loan, you’re beginning to own the apartment. Once you’ve paid off the whole loan, you will be the owner of the apartment, meaning you can sell it for just as much as you paid each month. In some areas of the city, the rent you would pay in 3 years would have been enough to buy the whole apartment.
- With your past 3 years of rent, you could have bought your apartment!
What’s the Hook?
You may be thinking that it all sounds too easy. Well there is one hook to the whole paying off a loan with monthly payments. You have to pay what is called a downpayment. When you buy a piece of real estate, and take out a mortgage (remember, a mortgage is just a loan to pay for real estate), you pay a percentage of the total amount up front, and then pay off the rest in monthly payments. On the other hand, you can also see it as a bank paying 80% of your apartment, and you only pay a small piece of it. The key here is that, just like paying for a vacation, you save up once, and afterwards pay the same amount as your rent, and you’re making money.
When you buy real estate, you only pay 20%!
What you Have to know About Apartment Hunting!
These are the things you have to know about buying an apartment. Remember! Even if you’re not looking for an apartment specifically right now, these tips can be helpful, because sooner than later, you may find yourself looking into buying an aprtment, and many of these tips are things you can do right now that will make your life easier when the day comes.
Start Doing this Now!
Even if you’re years away from buying an apartment, you need to start taking care of your finances. That means, keep bank statements, and keeping track of loans. Most importantly though, when you buy an apartment, your past finances will be checked (called a credit report). If this check shows that you took out many loans, took a long time to pay these back, or worst case, failed to pay these back, you’re going to have a hard time finding a company to loan you money without charging exorbitant sums of interest. That means, avoid using your credit card, start saving as much as you can in case of unexpected expenses, and pay back anything you owe as fast as possible.
- Care for your finances!
The Negotiation
When you get to the point of buying the apartment, you’re going to have to do some negotiating. Here, you can save you thousands or make the seller breaks off the deal. Not to worry though, we know exactly how you can save thousands, as opposed to lose the deal. When buying an apartment in Los Angeles, negotiation takes place like this. You make an offer. This is either renegotiated or accepted. Then, a building inspection is conducted, after which you can typically, based on the inevitable issues which the inspector finds, renegotiate again and reduce your price.
- Always renegotiate!
Remember that on top of the ‘up-front’ cost of the apartment, you will pay additional costs, such as transfer taxes and title fees. These can be a few thousand dollars if you’re unlucky, but in your negotiation, you can ask the seller to pay these, while you only pay the up-front cost.
Negotiate Closing Costs!
The famous Venice Canals offer up countless walks enjoying the unique urban architecture
Know What you’re Looking For!
You probably know what you like, but what is it called? A two-story walk-up? A studio? Do you want a front-gabled with a Stucco facade? The world of real estate has a language unto itself, but in L.A. there’s only a few types of important types of real estate you have to know, and if you’re looking to buy an apartment in L.A., unless it’s a classic one-bedroom, it’s likely one of these: Duplexes, Studios, Lofts, and micro-apartments.
Duplexes are mosts similar to a house, because in a sense they are a house. Unlike the typical commerical apartment buildings, these are houses which are split up into typically two identical apartments. The advantage: You typically have more privacy, and your own entrance. Studios and lofts are quite similar. A studio is an apartment which (apart from the bathroom) is made up of one single room which houses the sleeping, leisure, and cooking area. Lofts are studios with high ceilings, lots of windows, and typically larger than normal studios. Lastly, micro-apartments. These are lofts which have very little space. Typically without a leisure area, or combining a leisure and sleeping area with e.g. a pull-out couch. You’ll find these in downtown and denseley populated places.
- Duplex: Most like a house
- Studio: No separate rooms
- Loft: Studio with industrial style
- Micro-Apartment: Very small studio
Don’t forget the HOA!
Even if you buy an apartment, you’re going to be paying a recurring fee to the organization which takes care of the shared spaces. That means doing renovations, fixing the elevator when it’s broken, etc. But not all Homeowner Associations (HOA) are created equal! Some can be a major pain, because they do not perform the necessary renovations. In other cases, tenants can be problematic, and HOA’s fail to take care of this. There’s many things that can go wrong, so the best thing to do usually is to talk to a few neighbours, who can clue you in on the details.
- Talk to your Neighbors!
Choose the Right Neighborhood!
Real estate, including apartmentss, is all about location location location. You want to buy an apartment in an area where you want to live of course, but there’s other things to think about. You likely want to have good connection to public transport, even if you own a car. Related to that, you also want to have a freeway nearby, to have amenities such as shopping and grocery opportunities nearby. Depending on your leisure activities, perhaps you’ll also want to keep an eye out for cafes, clubs, restaurants, and bars in the area.
- Check out the area!
Lastly, and very importantly, you want a neighborhood on the up, and not on the descent. Some neighborhoods are becoming massively popular (which those are, further down), meaning that prices are increasing massively. One day, when you sell your apartment, you’re going to want to get as much money for it as possible, so to choose a neighboorhood which is gaining poppularity is an inveitably profitable decision.
- Buy in up-and-coming areas!
Where to Live in Los Angeles
Compton, Hollywood, Westwood, Bel-Air… The list goes on and on. Los Angeles is probably home to the most iconic neighborhoods worldwide. We give you a run-down of the hottest spots in the city, where buying an apartment is sure to make you a happy homeowner.
Silver Lake – Trendiest Spot
Silver Lake is LA’s Brooklyn. The place with most young, hip, creative and stylish people. This is where you’ll find the trendiest bars, the newest and hottest cafes, and more. There’s also the famous griffith park, and east river, and more, all with great access to freeways and spitting distance to downtown L.A.
A drive through these neighborhoods will give you a good idea of what they’re like!
Glendale
If you want to live away from the stress, but not somewhere in the country, Glendale may be your spot. It not only one of the safest areas in LA., but also close to the LA Zoo, the Norton Simon Museum, Travel Town, hiking trails in the San Gabriel Mountains, etc. Zillow classifies the Glendale housing market as “very hot”. Makes sense considering it’s also the lcoation of one of L.A.’s busiest and hottest shopping streets in the form of Brand Boulevard and The Americana at Brand
Below, the Americana at Brand, one of L.A.’s famous shopping locations
Culver City – Creatives and Trendy Bars
Another L.A. neighborhood with trendy cafes and bars en masse. Culver city has arguably joined the ranks of el segundo, and beverly hills in pop culture legacy, making its name as the hippest and coolest area for young creatives and artists. Fast forward a few years, and like in so many places, gentrification has taken its course, not so that it’s unenjoyable though. This area offers up some legendary locales, and a totally unique atmosphere!
Venice
Venice is a legendry area. No doubt it’s also become a major hotspot for tourists, but that doesn’t mean it doesn’t have its charm. It’s home to some luxurious apartments, and just like many other of L.A.’s top destinations, it’s a great place if you want to try out some trendy bars and cafes. Not to forget, the massive stretch of beach where surfing, volleyball, sunbathing, etc. can become part of your everyday routine!
Checklist: Buying an Apartment in Los Angeles
So now it’s up to you. You know you should buy, the only remaining question is when will you buy? This is our checklist for buying an apartment in L.A.
- Take Care of your Finances!
- Negotiate right
- Know What you’re Looking For!
- Don’t forget the HOA!
- Choose the Right Neighborhood!
This article was written by our friends from Lukinski:
