Bay area: rent or buy for long-term housing?
Does it make more sense currently to rent or buy a SFH in the Bay area, assuming a 10+ year time frame? Specifically the area between SF and Mountain View.
Edit: assume a 20% down payment is doable.
- SAP kbronRenting a bigger house is more expensive than renting an studio or even a room. Besides if you have wife/children, moving is more of a problem compared to when you are single. Finally if you are single and buy 2br home or more, lots of real state wasted (unless you rent). If you are single you better pay only for what you use. My 2cents.Nov 25, 20184
- Microsoft HappyThankFrequent moving is not good for kids (eg lose friends, hard to build friendship, unseen anxiety due to instability). Owning gives you the option to stay for a long time vs rent. If house rent, rent fee is high and you will need to be careful to not damage anything which is hard with kids. You cannot decorate like others do either (eg Christmas). For condo, kids won’t have safe spaces outside to play at as there are hardly pedestrian ways. Same for apartments.Nov 25, 20182
- If you can afford 20% down and will hold for ten years now is a great time to buy a sfh. Sellers can be easily spooked and interest rates are still low.
- Financially, it is always better to rent (assuming one invests the money in equities long term). But there are emotional factors that impact the process - such as ownership, kids.
- There are a lot of intangibles in owning a house though.
Not having to worry about rent increases, having control about when repairs get done instead of waiting on a landlord to do so, having control on interior decoration as opposed to wondering if the landlord will charge you a cleanup fee for removing a poster, etc.
Also, housing is a 5x leveraged investment (assuming 20% down). Say you put a 200k down payment on a million dollar house. If the house increases in value by 20% (to 1.2 million), your return is 100% (200k equity to 400k equity).