WatchSan Francisco Bay Area rent/buy ratios from the housing calcualtor at patrick.net show that housing is still greatly overpriced in most zip codes.
The following average rent vs buy ratios were calculated by considering 97,537 rents and 58,171 asking prices throughout the Bay Area from January to March 2010, comparing properties with the same number of bedrooms and same single-family vs multi-family status. The results generally show that more expensive neighborhoods remain very overpriced, since annual rents are running at 2% or 3% of asking prices for the same size and type of house in the same location. Such low rents are not much more than property tax and maintenance. This means that in wealthy neighborhoods, the use of more than a million dollars in housing capital can be had essentially for free by renters.
Conversely, cheaper Bay Area neighborhoods now show some real bargains for sale, with annual rents running at 9% or 10% of the purchase price. Landlords are buying these places because they are clearly profitable as rentals as long as rents hold up.
A few zip codes such as Menlo Park are split, having both a poorer area and a richer area with very different rent/buy ratios. The average in this case masks large local differences. Zip codes with fewer than 10 rentals for each housing size category were ignored.
The hightest ratio was 14.8%, in Vallejo, making this area the most promising for new house buyers and for landlords. The lowest ratio was 2.1%, in the Berkeley hills neighborhood with zip code 94705, making this real estate the worst deal for buyers in the Bay Area, on average.
| City | Zip | Ratio |
|---|---|---|
| Alameda | 94501 | 3.5% |
| Alamo | 94507 | 3.8% |
| Albany | 94706 | 4.6% |
| Antioch | 94509 | 11.6% |
| Antioch | 94531 | 9.1% |
| Aptos | 95003 | 3.9% |
| Belmont | 94002 | 4.0% |
| Belvedere Tiburon | 94920 | 2.8% |
| Benicia | 94510 | 4.7% |
| Berkeley | 94702 | 5.2% |
| Berkeley | 94705 | 2.1% |
| Berkeley | 94709 | 4.4% |
| Berkeley | 94710 | 4.2% |
| Boulder Creek | 95006 | 5.4% |
| Brentwood | 94513 | 4.9% |
| Brisbane | 94005 | 4.3% |
| Burlingame | 94010 | 3.3% |
| Campbell | 95008 | 3.5% |
| Capitola | 95010 | 2.7% |
| Castro Valley | 94546 | 5.1% |
| Castro Valley | 94552 | 4.1% |
| Cloverdale | 95425 | 5.1% |
| Concord | 94518 | 6.7% |
| Concord | 94519 | 5.9% |
| Concord | 94520 | 9.1% |
| Concord | 94521 | 7.2% |
| Cupertino | 95014 | 2.9% |
| Daly City | 94014 | 5.1% |
| Daly City | 94015 | 5.4% |
| Danville | 94506 | 3.4% |
| Danville | 94526 | 3.1% |
| Dublin | 94568 | 5.4% |
| El Cerrito | 94530 | 4.0% |
| El Sobrante | 94803 | 5.9% |
| Emeryville | 94608 | 5.3% |
| Fairfax | 94930 | 2.8% |
| Fairfield | 94533 | 7.8% |
| Fairfield | 94534 | 4.4% |
| Fremont | 94536 | 4.5% |
| Fremont | 94538 | 4.7% |
| Fremont | 94539 | 3.2% |
| Fremont | 94555 | 3.9% |
| Gilroy | 95020 | 3.8% |
| Greenbrae | 94904 | 5.9% |
| Half Moon Bay | 94019 | 4.1% |
| Hayward | 94541 | 6.5% |
| Hayward | 94542 | 4.4% |
| Hayward | 94544 | 7.2% |
| Hayward | 94545 | 5.3% |
| Healdsburg | 95448 | 3.0% |
| Hercules | 94547 | 6.2% |
| Hollister | 95023 | 8.5% |
| Lafayette | 94549 | 3.5% |
| Livermore | 94550 | 6.2% |
| Livermore | 94551 | 4.7% |
| Los Altos | 94022 | 2.7% |
| Los Altos | 94024 | 2.7% |
| Los Gatos | 95030 | 2.4% |
| Los Gatos | 95032 | 3.4% |
| Martinez | 94553 | 5.9% |
| Menlo Park | 94025 | 5.3% |
| Mill Valley | 94941 | 3.4% |
| Millbrae | 94030 | 3.2% |
| Milpitas | 95035 | 4.8% |
| Morgan Hill | 95037 | 3.7% |
| Mountain House | 95391 | 5.9% |
| Mountain View | 94040 | 3.5% |
| Mountain View | 94043 | 4.7% |
| Napa | 94558 | 3.6% |
| Napa | 94559 | 4.6% |
| Newark | 94560 | 5.3% |
| Novato | 94945 | 3.1% |
| Novato | 94947 | 6.0% |
| Novato | 94949 | 3.6% |
| Oakland | 94601 | 10.1% |
| Oakland | 94602 | 4.8% |
| Oakland | 94603 | 10.6% |
| Oakland | 94605 | 6.7% |
| Oakland | 94606 | 6.4% |
| Oakland | 94607 | 5.2% |
| Oakland | 94609 | 7.1% |
| Oakland | 94610 | 5.7% |
| Oakland | 94611 | 4.8% |
| Oakland | 94612 | 4.0% |
| Oakland | 94618 | 3.2% |
| Oakland | 94619 | 5.9% |
| Oakland | 94621 | 13.8% |
| Oakley | 94561 | 7.9% |
| Pacifica | 94044 | 4.7% |
| Palo Alto | 94301 | 2.9% |
| Palo Alto | 94303 | 3.6% |
| Palo Alto | 94306 | 2.7% |
| Petaluma | 94952 | 2.2% |
| Petaluma | 94954 | 3.6% |
| Pinole | 94564 | 4.0% |
| Pittsburg | 94565 | 7.4% |
| Pleasant Hill | 94523 | 5.4% |
| Pleasanton | 94566 | 4.5% |
| Pleasanton | 94588 | 5.0% |
| Redwood City | 94061 | 3.5% |
| Redwood City | 94062 | 2.7% |
| Redwood City | 94063 | 6.4% |
| Redwood City | 94065 | 3.9% |
| Richmond | 94801 | 12.9% |
| Richmond | 94804 | 8.4% |
| Richmond | 94805 | 10.4% |
| Rodeo | 94572 | 6.6% |
| Rohnert Park | 94928 | 6.1% |
| San Anselmo | 94960 | 3.7% |
| San Bruno | 94066 | 5.0% |
| San Carlos | 94070 | 3.3% |
| San Francisco | 94102 | 5.4% |
| San Francisco | 94103 | 4.4% |
| San Francisco | 94105 | 6.1% |
| San Francisco | 94107 | 4.4% |
| San Francisco | 94109 | 4.5% |
| San Francisco | 94110 | 3.9% |
| San Francisco | 94112 | 4.0% |
| San Francisco | 94114 | 4.2% |
| San Francisco | 94115 | 4.1% |
| San Francisco | 94116 | 3.7% |
| San Francisco | 94117 | 3.9% |
| San Francisco | 94118 | 3.7% |
| San Francisco | 94121 | 3.2% |
| San Francisco | 94122 | 3.6% |
| San Francisco | 94123 | 3.7% |
| San Francisco | 94124 | 5.5% |
| San Francisco | 94127 | 3.1% |
| San Francisco | 94131 | 4.0% |
| San Francisco | 94133 | 4.2% |
| San Francisco | 94134 | 4.5% |
| San Jose | 95110 | 4.9% |
| San Jose | 95111 | 9.6% |
| San Jose | 95112 | 5.2% |
| San Jose | 95116 | 6.5% |
| San Jose | 95117 | 3.7% |
| San Jose | 95118 | 6.5% |
| San Jose | 95121 | 6.3% |
| San Jose | 95122 | 6.5% |
| San Jose | 95123 | 5.8% |
| San Jose | 95124 | 3.8% |
| San Jose | 95125 | 3.9% |
| San Jose | 95126 | 4.0% |
| San Jose | 95127 | 4.7% |
| San Jose | 95128 | 4.5% |
| San Jose | 95129 | 3.3% |
| San Jose | 95130 | 4.1% |
| San Jose | 95131 | 4.3% |
| San Jose | 95132 | 4.6% |
| San Jose | 95134 | 10.4% |
| San Jose | 95135 | 4.0% |
| San Jose | 95136 | 5.2% |
| San Jose | 95138 | 5.9% |
| San Jose | 95148 | 4.3% |
| San Leandro | 94577 | 5.9% |
| San Leandro | 94578 | 6.8% |
| San Leandro | 94579 | 5.6% |
| San Lorenzo | 94580 | 7.1% |
| San Mateo | 94401 | 4.3% |
| San Mateo | 94402 | 3.3% |
| San Mateo | 94403 | 4.1% |
| San Mateo | 94404 | 4.4% |
| San Pablo | 94806 | 8.8% |
| San Rafael | 94901 | 4.0% |
| San Rafael | 94903 | 4.7% |
| San Ramon | 94583 | 4.5% |
| Santa Clara | 95050 | 4.5% |
| Santa Clara | 95051 | 4.6% |
| Santa Clara | 95054 | 3.2% |
| Santa Cruz | 95060 | 3.6% |
| Santa Cruz | 95062 | 3.1% |
| Santa Rosa | 95401 | 8.0% |
| Santa Rosa | 95403 | 4.4% |
| Santa Rosa | 95404 | 3.1% |
| Santa Rosa | 95405 | 4.2% |
| Santa Rosa | 95407 | 6.5% |
| Santa Rosa | 95409 | 7.6% |
| Saratoga | 95070 | 2.1% |
| Sausalito | 94965 | 3.5% |
| Sebastopol | 95472 | 3.3% |
| Sonoma | 95476 | 3.1% |
| South San Francisco | 94080 | 5.1% |
| Suisun City | 94585 | 8.1% |
| Sunnyvale | 94085 | 4.4% |
| Sunnyvale | 94086 | 3.9% |
| Sunnyvale | 94087 | 3.3% |
| Sunnyvale | 94089 | 9.1% |
| Tracy | 95376 | 8.5% |
| Tracy | 95377 | 7.5% |
| Union City | 94587 | 6.0% |
| Vacaville | 95687 | 9.7% |
| Vacaville | 95688 | 4.5% |
| Vallejo | 94589 | 14.8% |
| Vallejo | 94590 | 11.0% |
| Vallejo | 94591 | 7.5% |
| Walnut Creek | 94595 | 4.5% |
| Walnut Creek | 94596 | 5.4% |
| Walnut Creek | 94598 | 4.7% |
| Watsonville | 95076 | 3.7% |
| Windsor | 95492 | 5.4% |
Permission is granted to the public to copy this article verbatim.
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33 comments
Pleasanton, CA
Well, a colleague of mine just bought a condo in SF where the monthy rent comps were about equal to the monthly ownership costs.
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SanMateoRenter says
Really? Could you be more specific? Not asking for addresses of course, but I would be very interested to hear general area and rent vs. ownership costs.
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Redwood City, CA
@SanMateoRenter
I think you've lucked out, as many rental places keep costs minimal by avoiding, deferring, or applying very cheap replacements.
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Pleasanton, CA
I agree. I think it's the difference between renting someone's home and renting a "rental house." The latter will certainly have the problems you've described. Try to rent a place that was owner-occupied and just went on the market, but isn't selling. Or a place where the owner has just moved and doesn't want to sell yet due to the market, or is planning to come back in a few years. I've rented all of these scenarios and the key is avoiding the under-maintained rental homes. I think you can quickly sniff out those places. But the others are out there.
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Redwood City, CA
I got one of those, it was pretty nice! But a total fluke.
Only once! And it was from a realtor! Amazingly, they put up the WORST pictures on craigslist for this place, it looked like a total dump. When we got there, we just said we'd take it. We knew the next person who saw the place was going to grab it. It was 10X better than anything else out there. Unfortunately, I've only had that luck once! I spent a decent amount of time looking too.
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Pleasanton, CA
I hear you -- you do have to search a lot. We've been very lucky -- three times in a row now. Though I do think, if prices become economical again, that our next move will be to ownership. But otherwise, we'll go for #4! :-)
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The SJ Mercury had a chart a couple days back which can help explain why prices have not fallen in "The Fortress" as they have elsewhere. Unfortunately I could not find it online, so please believe me.
The highest unemployment rate in Santa Clara County was Gilroy, about 17%. Morgan Hill was 15. San Jose was 13.
Cupertino was 7.1. Los Gatos was about 7. Los Altos, Saratoga, and Palo Alto were in the 6 range.
Now, 6% unemployment is worse than it was a few years back, for sure. But it's a lot better than 15%. So there's fewer people forced to sell, therefore prices have not fallen the same way. Surely the lack of buy up market is going to prevent price increases but this factor helps explain why prices have not fallen as much in those places.
SanMateoRenter, congratulations on a good renting deal. You seem to have hit the jackpot. Usually with rentals, they are one of the following:
- long term rentals. Good point is, owner probably can pay the mortgage/tax from rent. Bad point is, appliances and stuff are low grade. But it's cheap which is important. I've lived in such a place, and it was the right thing for me at that time.
- Recent rentals, such as "was owner-occupied and just went on the market, but isn’t selling." Will be nicer. Until the owner gets tired of paying more per month in mortgage and tax than he's getting in rent and sells or lets it foreclose.
The best is to rent from someone who has a job assignment outside of the area for a few years and intends to re-occupy. Of course, by definition that's a limited-term deal which may or may not be desirable.
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Pleasanton, CA
MarkInSF says
South of Market and mid 600's to buy (low interest rate) vs. ~3k/month rent.
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Vallejo is a very dangerous city. It makes sense that it would top the rent to buy ratio. If you have to live in Vallejo, renting is clearly the best option, because you can always walk away from the property. But, if you own a house and can't convince a buyer that the guys hanging around dealing drugs and nice friendly neighbors, you have an asset that is not easily sold, and one that may take a serious price reduction to move. So, beware of basing purchase decisions on the rent to buy ratio.
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Something tells me certain zipcodes will remain high for a long time on the basis of high incomes, high number of wealthy part-time residents, reversal of the flight to the burbs demand for living close to work and short commute distances is increasing), and/or high performing school districts. This will usher in a highly stratified society of islands of desirable areas and seas of impoverished crime-ridden crap. This trend is even more pronounced in the LA area. There are numerous "no-go" zip codes with dirt cheap real estate prices and then there are the still highly desirable zip codes that people fight to live in. As the "no-go" ares deteriorate the desirable areas will remain fairly intact with some spill over crime. There are very limited areas that are not "no-go" and many people will either endure the high cost areas or move away to another metropolitan area. Also look at Oakland, there is a HUGE disparity in prices of adjacent zipcodes and even areas within the same zipcode. Check out the disparity in prices between property in the "desirable island" east of 24, north of 580 in Oakland versus the prices outside this desirable island. There are many islands of desirability in seas of crap all over the Bay Area and CA.
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Doesn't Berkeley still have rent controls and wouldn't this skew the numbers there. If Berkeley were a free market I would think the ratio would be much more ownership favorable. The Elmwood area in Berkeley (94705) is very desirable and has very little supply of housing for sale.
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stocksjustgoup says
Geographically, Morgan Hill is a part of West Valley. Did you check out the back of Morgan Hill on the west side? Stately mansions on multi-acres all the way to south San Jose's McKean Road, it is a very upscale neighborhood in the making.
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OO says
All built 10 years ago based on big stock options IPO cash outs. But as you can see havent had IPOs or big overvalued stock prices since. Its been the opposite we have shrunk in the number of public companies an back to more rational valuations. No Party like its 1999!
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Not sure about whether one should buy or rent, everyone's expectation and circumstances are different.
But I'd say the chart is a perfect illustration of crime rate distribution in the Bay Area. The rent/buy ratio is perfectly, inversely correlated with the crime rate of an area. I will never buy in Vallejo, Richmond even for investment purpose because I need escort of bodyguards to collect rent. Rent/buy ratio of 10 or above is a screaming sign of "STAY AWAY!".
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thomas.wong1986 says
It has reached a critical mass, all upscale communities are built this way. I checked out quite a few there, all paid with cash. Of course there will be some busts, but the place is inherently pretty, so I'd expect as time goes by, it will actually flourish to fully realize its west valley potential. Morgan Hill is one of the few places in the Bay Area where white middle class are displacing Hispanic illegal workers, who now have to commute from Gilroy or Hollister. Their schools are getting better, particularly at the elementary level as more white middle class with young kids move in.
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I wonder why San Jose-95134 sticks out with such a good rental return % wise compared to the other San Jose Zips...
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Is 95134 East San Jose? If so, then crime rate explains the good rental return.
There is no free lunch in the Bay Area, if the rental return seems too good to be true, then it is too good to be true.
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47 male
Lafayette, CA
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OO says
95134 has a higher than average crime but not by a whole lot.
My favorite zip code is Concord 94520 @ 9.1%
Crime risk significantly lower than both state and national average: http://www.homefair.com/real-estate/city-profile/results.asp?Zip=94520
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San Francisco, CA
"The results generally show that more expensive neighborhoods remain very overpriced, since annual rents are running at 2% or 3% of asking prices for the same size and type of house in the same location."
Patrick, I appreciate this site for its intent to use facts and reason as a basis for discussion. Your statement here shows a bias toward renting. I'm not sure what you mean by "more expensive neighborhoods" but the data suggests to me that annual rents in such areas are running at 3% or 4% of asking prices. Admittedly, as a resident of San Francisco, I might be showing my bias.
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46 male
Menlo Park, CA
Even 4% is a horrible deal for the owner. You're not going to get any mortgage at 4%, so you immediately pay more there. And then there's property tax, maintenance, insurance, etc. So the buyer gets royally screwed because the price is just way too high compared to the rent.
I'm biased against losing huge amounts of money.
Try the calculator for pretty much any nice neighborhood in the Bay Area and you'll see what I mean:
http://patrick.net/housing/calculator.php
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San Francisco, CA
Patrick says
I agree completely. I just wanted to point out that 3% and 4% numbers seem to agree more with your list. Other people who read here might think the numbers not matching is an indication of bias and might miss all the helpful information here which will help them lead lives free of financial stress caused by lifetime debt commitments.
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uni6jon2 says
I understand not wanting to overspend on housing, but you've got it all wrong here. If you buy, you have 30 (or 15) years of debt payments. If you rent, then you truly have a lifetime of payments.
Additionally, when you buy (with a fixed rate) you establish some stability in your housing cost. When you rent, you are subject to more uncertainty in rental costs.
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San Carlos, CA
tatupu70 says
Oh for God sake. That 30 year timeline again. It just sounds desperate, really. I have yet to see a "bear" here ever advocate for renting "forever" or for 30 years. They advocate for not buying unless it makes fiscal sense on a reasonable timeline, like 5 years, the old standard. Why 5 years? Because more likely than not, you'll move within 5 years. If you buy an overpriced house and can't sell it - you are screwed.
Or not. Just walk away like the rest of the jackasses who gambled and lost, and now cry "foul".
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San Francisco, CA
Rent is much closer to a fixed cost than mortgage debt. There are almost no repair and maintenance costs. No taxes. No home associations. Rent can go up, but almost never has during the time I've rented apartments and houses in Portland, OR and San Francisco.
I just know that I'm glad I've not had to absorb the cost of all the repairs/maintenance needed during the time I've rented.
The main reason to buy is recognizing that you are unable to save money any other way. People find it so difficult to save money, that they accept the tiny amounts of money that can be saved by buying a house and paying incredible amounts of money to the lender. It sets up a regular payment system for them, of which they get a tiny amount back near the end of their life. If you're going to live a lifetime of debt, might as well do it all in one big chunk where, at least, you'll get a little back.
Up to you whether you consider thirty years "a lifetime." That's a good chunk. Fifteen years is definitely a much more reasonable balance of how a person spends their life versus how much interest they pay to lenders. I'm happy to have lived, so far, exactly where I want to live and spend my time.
Thankfully, I've always found it easier than others to budget my actual money/income and save some of it. So I'll rent until I know there's a house for sale exactly where I want to live for a price that does not mean spending a multiple of my income in interest.
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Pleasanton, CA
Thought I'd jump in on this one, particularly because my handle is going to be changing soon. After many years successfully renting very nice homes for half the cost of buying, and being an ardent supporter of renting and opponent of buying in places where the costs are ridiculously out of line with renting (eg. Palo Alto) we're about to close escrow on a house -- in one of the very nice tri-valley areas of the East Bay. More and more people are seeing the value there...
The economics are interesting because while the annual rental to purchase price ratio will be about 4.2%, the neighborhood is very desirable, has top schools, very low turn-over, with people living there for many, many years, and therefore, very little inventory. And given our loan is at 4.75% for 30-years fixed, even the infamous NYT calculator says that we'll be ahead in just 5-6 years assuming normal inflation levels. With 0% house appreciation, we'd still be ahead in 20 years due to rent increases and such. And we are planning on living in this home for some 20+ years, so I'm banking on the fact that as more inflation creeps back, our debt will go down in real terms, and home prices will ultimately be flat to up over 20 years. Rents will go up in both real and nominal terms over that time too.
And owning a house will give us the long-term stability we couldn't get renting houses. So it was the right time for us, and it looks like a reasonable enough deal to make sense now.
Now I won't be living in the iwog world, and will still sneer at the 2.5% ratios in places like P.A., but I will have joined the owner side of the world... :-)
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pkowen says
Did you read the post I was answering?
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My favorite zip code is Concord 94520 @ 9.1%
I have to admit I've got my eye on Richmond 94804 @ 8.4%. Either the Richmond Annex or Marina Bay for buying a rental if I can get one to pencil out.
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OO says
You could have said the same some 20 years ago as well when many left for Central CA.
But home builders didnt build mansion back than. The last 10-12 years was an anomoly,
build on bubble mentality, which is being reset due to more realistic economic enviroment.
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uni6jon2 says
That is NOT the main reason to buy. That is about the dumbest reason to buy I have ever heard.
uni6jon2 says
True, that is an advantage of renting. I don't think the maintenance costs are all that high, but they do exist. Probably less than the tax benefit, actually. But that's a different discussion.
uni6jon2 says
You're very fortunate then, because rents do go up. I guarantee you that your rent will be much higher 30 years from now.
Anyways--my main point was that if you buy, there will be a time in the future where you will have no housing payment (save taxes) while if you rent, you will always be paying. So, I would consider renter more of a slave than a buyer.
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congrats SMR, are you buying in Pleasanton or Danville? I have seen lots of friends and colleagues migrating that way since 2009. Except for commute, I have nothing negative to say about that area.
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thomas.wong1986 says
I am not talking about a general area. I am talking about the making of certain more upscale communities, and in the Bay Area, it has always been along the western foothills. If you will, the first critical mass of mansions in Atherton, Hillsborough, Los Altos Hills gotta start somewhere. The world is not all doom and gloom, no matter what kind of shit or reset that will come this way, there will always be affluent people.
I don't believe that Silicon Valley will turn into Detroit, and if you think that is the future, you shouldn't be lurking around here anyway.
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EBGuy says
The good news is, you don't need escort to collect rent in Marina Bay. What is the dividing line between Marina Bay and the rest of Richmond?
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OO says
Larry Ellison was the first to coin that phrase..."SV is becoming Detroit". Like many founders of well known companies in SV over the past decades they see the high costs of homes as deterent from hiring in the Bay Area and rather set up shop elsewhere. You can call them Doom and Gloom but they call the shots who works for them, where, and how much. To them it is a numbers game and the bottom line.
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Pleasanton, CA
OO says
Nailed it - Pleasanton. Can commute to Silicon Valley from there. You know, I can drive a little more to save some $90k/year in mortgage/tax expenses!! After watching the market closely the past several years, I can say with confidence that you pay about 50-55% less out there compared to a like property in Palo Alto. Seriously.
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San Francisco, CA
tatupu70 says
The tricky part, thinking of the simple math involved, is your "time in the future." Compound interest has time in the exponent. So if you want a lot of money, getting the time part as big as possible is the most advantageous goal for a bigger number.
Unfortunately, buying a home with debt(mortgage) means that you'll be, instead, paying that interest over time to someone else.
By saving your own money, there can be a time in your future where you're the one loaning money to other people.
Of course, if you can buy a house and save money, that could lead to a great level of financial independence too. That's been a tough picture to paint while home prices are at their current levels. Plus since the price/debt is only the beginning of house ownership cost, you're looking at a future of unknown financial planning. Mostly the lenders making money these days.
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San Francisco, CA
tatupu70 says
Yeah, the mental state and planning this allows is probably the bigger benefit. Fixed costs are easy for finanical planning. Very few unexpected, big costs. Patrick also points out that you're also unlikely to sit around dreaming about how much bigger your house could be and then go spend more.
Still, in almost four years of renting a house in San Francisco it's been painted, the downstairs laundry area has flooded twice, once just leading to a need for industrial driers and a bunch of (my landlord's)time spent pulling back carpet, pulling/replacing floor boards, the second time because of a hot water heater failure so the hot water heater was replaced, all downstairs carpet replaced, more industrial heaters, paying the difference in my electricity bill, an arborist, a gardener, recently repairing the gas heater($500), cleaning gutters and a bunch of other little stuff.
Definitely only a few thousand dollars, but...what's next?
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tatupu70 says
I can buy into what you are saying if your monthly outlay for buying and renting was the same, but if you are paying 2, or 3 times more (not unusual at the current house prices) for housing each month renting is a much better option.
Image if your rent was $1000, but to buy the same place was $2000 for a 30 year mortgage. Assuming that you could invest and stay even with inflation; by renting you would have $1,560,000 in today’s dollars saved at the end of 30 years of renting.
I am guessing that the renter could throw down cash on a house that is quite a bit nicer than the one the “owner” just finished paying off.
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SanMateoRenter says
I think these are the kinds of reasons that really make buying sensible. They're just not reasons that settle in my mind.
I live a mile from the office where I work. I walked to work both of the last two days. The weather really has been nice in the Bay Area! I admit that I find this benefit much more valuable that most people.
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uni6jon2 says
Correct me if I am wrong, but I think the rule of thumb is planning on an average of 1% a year to maintain a house.
You could get several years of nothing then *boom* $20K for a new roof.
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uni6jon2 says
I live almost 2 miles from work, and I love my walking commute. However, if it is raining really bad I will bus it.