rent or buy in Los Angeles?

Question

Dear Bigger Pockets Community,

Thank you so much for the warm welcome! I'm new to real estate and am moving with my husband to an expensive market (Los Angeles). We are debating if we should buy a condo here (we would need to live in a fairly expensive neighborhood such as Westwood or Santa Monica due to commuting schedules), invest in long distance real estate, or some combination. Rent here is fairly expensive as well and can be similar to mortgage payments depending on the percentage downpayment, though there are also ongoing concerns such as fire and earthquake insurances. Since the fires, rent has gone up and most of the rentals are in poor condition unless we pay at least ~$3300 for a 1 bedroom or ~$5000 for a  2 bedroom (we could probably fit in a 1 bedroom for next year but will likely need to move to a 2 bedroom after that). We will be here for 3 years but don't anticipate living here for much longer. We probably have anywhere from $150,000-$250,000 to invest but I am hesitant about getting into anything overly risky as I know I still have a lot to learn. I am hoping to build multiple income streams as we are both physicians and looking to grow our family, but there is very little flexibility in clinical schedules. I would be grateful to hear any advice or perspectives.

I've also been connected to companies such as STR Search but I'm a little hesitant since you have to commit before seeing potential properties or even fully understanding the geographic location of where the potential STRs would be located.

Many thanks,

Kerlous Tadres · Answer

Welcome! You’re in a great position—strong income, a solid savings base, and the right mindset. Since you're only in LA short-term and have tight schedules, buying a primary residence there might not make the most sense unless you find a great deal with strong resale/rental potential. Long-distance investing in stable, landlord-friendly markets (think Midwest or Southeast) could let your money stretch further and cash flow better with less risk. Starting with one solid long-term or mid-term rental could help you learn while keeping things relatively hands-off. You're doing the right thing by being cautious with STRs—always good to know the market and regulations before jumping in.

Mike Day · Answer

On a three-year timeframe, it probably isn't a wonderful idea to buy a condo for yourself. With the amount you have for your down payment, your monthly payment will go up versus renting, and when you sell, keeping in mind the higher payments you've made over the years, there won't be much upside in it.

You could buy a small rental condo somewhere in SoCal, not the neighborhoods you want to live in, in cash. The cashflow will be nothing to write home about, but it will sit and appreciate. When you sell it at the end of the three years, it will come out better than buying your own residence with the large monthly payment. Still, not big bucks.

Another option, the one I choose, is to take your money and invest out of state. $250k can do a lot for you in the Midwest or the south, but long-distance land-lording is not for everyone.

Allan C. · Answer

If you're in a short time horizon I don't think it's worth buying. You have a fair amount of transaction costs (commission and transfer taxes) that will eat into any appreciation. And while rents have increased since the fires, they are still relatively low compared to purchase costs and debt servicing at today's rates.

Now, currently legislation proposals on SALT limits may change the math if you fall into the itemized tax deduction category, but that shouldn't be a deciding factor.

Rick Albert · Answer

What are you intending to do after the 3 years? Move? Sell? Rent out the unit?

3 years is not a long enough horizon right now to see mass appreciation. The only caveat would be to buy a fixer condo and ideally 3+ bedrooms (so you become the house alternative but this is a want, not a need).

Condos can be great investments but you have to really look at the HOA financials. Many are in tough spots right now between balcony inspections, older plumbing, and other systems that are nearing the end of its life. This means potential special assessments and increasing HOA dues in the near future. Those are things you have to budget for.

The only main advantage would be tax benefits and loan buy down each month. You might break even in three years but no guarantees. Generally speaking home values are going up in LA, how much is to be determined.

Becca F. · Answer

I commented on your other post. Strange coincidence that the other two comments on here are people from Indianapolis.

I invest in the Bay Area and also in the Indianapolis metro area. For context, I did live in Indiana, then moved back to California. I flew back there last year to check on my rentals and see friends. Since you're a physician there's a decent hospital network there, IU Health, St. Vincent, etc. I think they are also building a new hospital downtown.

My properties are in Hamilton County and Indianapolis (east side), both long term rentals. I'm very biased towards Hamilton County and the Northside in general - my home has doubled in value (bought in 2013). Carmel has gotten expensive but has an excellent school district, as well as Westfield, Noblesville and Fishers. The west side suburbs (Danville, Brownsburg) and Southside (Greenwood) are also good. I was thinking of this if you're having kids. You won't be able to do STR in Carmel. I'm not sure what STRs are like in the suburbs.

As far as Indy, to avoid writing a 10 page essay, it's neighborhood and street by street. Where I bought on the East side in 2023, I regret (unsure of future appreciation) - I would not send kids to public schools there. Washington and Pike Township may have some decent schools. I know a few CA investors doing STR in Indy.

Pros: landlord friendly, diverse industries, stable economy, good suburban schools for kids (my kids went to Carmel schools when they were little), insurance costs are reasonable (occasional tornadoes)

Cons: property taxes: mine are 2.77% Indy and 2.7% Hamilton County as an investor and they go up with no predictable pattern 17% for both homes recently, if you compare appreciation to California and western states, not as high, winter weather issues (frozen pipes if someone isn't checking on vacant properties

Ryan Rominger · Answer

With a 3-year timeline in Los Angeles, it’s wise to weigh the long-term return on buying in a high-cost market vs. investing elsewhere. If your goal is to build income streams with more flexibility, a hybrid approach could make sense: rent locally for lifestyle and location, and invest out of state in markets where your dollars stretch further and the cash flow is stronger.

There are busy professionals who do just that—buying solid long-distance rentals in landlord-friendly markets where teams are already in place to handle renovations, leasing, and management.

The STR model can work, but the key is transparency—and I'd be cautious with any company asking for commitments before showing you the full picture. You should absolutely know the neighborhood, comps, regulations, and revenue potential before making any decision.

Jimmy Lieu · Answer

Hey Paula! Welcome to BiggerPockets! Sounds like you’re in a really thoughtful position, which is awesome—you’re deciding between lifestyle, long-term strategy, and risk tolerance, which is exactly what you should be doing early on. Since you're only in LA for about 3 years, buying there—especially in a premium neighborhood like Westwood or Santa Monica—can be risky unless you're confident the property will appreciate enough to outweigh the high buy-in costs and potential carry risks. Insurance, maintenance, and tenant laws in CA can also be a challenge. Given your capital and your desire to avoid overly risky plays, long-distance real estate might be a great fit. You could potentially pick up 2–3 single family homes or small multifamily properties in a more landlord-friendly, cash-flowing market and hold them long term. I moved from Portland, OR to Columbus, Ohio in 2020 and now own 10+ rentals there, and I’ve seen a lot of people with a similar profile to yours do well here. The macroeconomics are strong—population and job growth are booming, and companies like Intel, Amazon, Google, Honda, and Facebook are investing heavily. You can still find properties in the $120K–180K range that hit the 1% rule, and the market has solid appreciation potential. If you’re looking at STR operators, I’d just make sure you know the zoning and local regulations well, especially before committing to anything upfront. Happy to connect and answer any questions you have!

rent or buy in Los Angeles?

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