Currently, is it financially smarter to rent or buy in the San Francisco, CA area?

Asked by Caribq10, Noe Valley, San Francisco, CA Fri Jul 8, 2011

30-something professional, 1 year at currently job, single.

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William Ng’s answer
William Ng, Home Buyer, San Francisco, CA
Mon May 7, 2012
With renting you are protected from large rent increase, if you find a rent protected home. People that stayed in their units for the last 25 years are paying about 1/3 what the market rate will bear for their rent.

But Prop 13 makes owning pretty nice in Cali.
0 votes
Susan B. Boy…, Agent, Daleville, AL
Wed Nov 23, 2011
I'm not sure about how the market is in California, you'd have to check with local agents to find out what would be the best option in your area. The area that I'm in a lot of times it's better to buy right now, especially with the interest rates being so low. For the same price or even less than you'd pay in rent you could be making mortgage payments which is a great investment instead of throwing your money away with rent payments, ( unless of course you're renting to own). Most of the time the rent your paying is based on what the owner payed for it years ago when the rates were higher, that's another reason you should do your research in your area and of course taking your situation in consideration as to which would be better.

Susan Boyles
1 vote
Robert Chome…, , San Diego, CA
Tue Nov 22, 2011
Here's what I would look at:

1. What is the rent I would pay if I didn't buy?
2. What is the mortgage+taxes+insurance+hoa+repairs I would pay if I DID buy?
3. What is my tax savings from the mortgage and property tax write off PLUS how much principle am I paying down on the mortgage every month?

If #1 is equal or greater than #2 minus #3 it's probably better to buy if you plan to live there for 7+ years. Because rents will keep rising, but with a 30 yr fixed rate loan your payment will stay the same for 30 yrs.
1 vote
Great analogy
Flag Wed May 2, 2012
Steadystate, Home Owner, Cupertino, CA
Tue Nov 22, 2011
It will very from city to city but the following three cities you should rent:
1. Sunnyvale - median home price = 8 * median family income
2. Cupertino - median home price = 10 * median family income
3. Saratoga - median home price = 12 * median family income

Now - going by another metric:
a home that rents for $3000 in Sunnyvale sells for $900K to > $1M
a home that rents for $4000 in Cupertino sells for $1.3M to $1.5M
a home that rents for $5000 in Saratoga sells for $1.6M to $1.8M

Listening to agents on this matter is like asking Vinny (the loan shark) if taking a loan at 33% interest is a good idea. Vinny makes his living with such loans so he says yes. Sensible people say no.
1 vote
Irina Karan, Agent, Aventura, FL
Thu May 3, 2012
Great info from the pros!

Rent vs. buy calculators are great, as well as your agent's research on the type of property you'd like to buy (affordability) and the rental rates in the area. You got to look at the local trends also - for home prices (on the rise or not), and for rent. It's great to buy when the prices are the lowest and the mortgage rates are great - like now.

Personally, I like Suzie Orman's approach to this - she usually wants the buyer to have enough of "savings" to cover for the loss of job etc...for emergencies, saving pattern for pension (starting early is best).

Best of luck,

Irina Karan
CDPE - Certified Distressed Property Expert
Beachfront Realty, Inc.
0 votes
Tom Inglesby, Agent, Portland, OR
Sat Nov 26, 2011
How long do you expect to live in SF? If you plan on living there 3 years or more, I would recommend buying with rates where they are. Rates today are at 50 year lows and just going up to 6% where they were 5 years ago would take a $350,000 mortgage up $250 a month. Talk to a lender first and see what you can afford and then ask friends for a referral for a agent that gave them great service.
Tom Inglesby Broker
0 votes
Mitchell Hall, Agent, New York, NY
Fri Nov 25, 2011
Gary Small at Zephyr in San Francisco specializes in Noe Valley. He is a very experienced agent and can help you determine and find you a home that is best for you.

Contact Gary, he can talk to you about the Real Estate process and discuss the opportunities in each neighborhood and price point. Sales or rentals.

Gary Small
Noe Valley Office
4040 24th Street
San Francisco, CA 94114
Cell: 415.309.1615
0 votes
Mindy Thomas, Agent, San Antonio, TX
Thu Nov 24, 2011
That would depend on the length of time you plan to live in San Francisco, CA. Interest rates are great now, and home prices are low, it's a great time to buy!
Web Reference:
0 votes
Joshua Rabin…, , Los Angeles County, CA
Wed Nov 23, 2011
Depending on the price range and your down payment/prequalification I would recommend buying. The interest rates are almost too good to be true and if you are looking in the 200's market with a pre-qualification you are golden. Let me know if I can be of any more help. Best, Joshua Rabinovitz.
0 votes
Attilio La M…, Agent, Miami, FL
Wed Nov 23, 2011
I'm not sure about how the market is in California, you'd have to check with local agents to find out what would be the best option in your area. The area that I'm in a lot of times it's better to buy right now, especially with the interest rates being so low. For the same price or even less than you'd pay in rent you could be making mortgage payments which is a great investment instead of throwing your money away with rent payments, ( unless of course you're renting to own). Most of the time the rent your paying is based on what the owner payed for it years ago when the rates were higher, that's another reason you should do your research in your area and of course taking your situation in consideration as to which would be better
0 votes
Terry Bell, Agent, Santa Rosa, CA
Tue Nov 22, 2011
Check with your tax accountant about the benefits and tax deductions of home ownerships. If San Francisco is too expensive, consider buying a rental house for an investment up here in Sonoma County! Best, Terry Bell, Realtor, Santa Rosa, CA 707-292-5712
0 votes
Barbara Brod…, Agent, San Mateo, CA
Sun Nov 20, 2011
It all depends on your situation. This is what I always say...if you are renting in San Francisco you should really really can't go wrong in investing here in San Francisco, if you have a great realtor that is knowledgeable and can guide you well based on your short term and long term plans, you should be good to go. If you are in need of a great mortgage planner I have a couple of reputable solid honest lenders in San Francisco for starters to show you the monthly payments including taxes etc vs your monthly rent for starters, I can provide you with those numbers and if you need Realtors I know several in SF in each district that can help you best.
0 votes
steven yarger, Agent, San Francisco, CA
Sat Nov 19, 2011
I have to agree that it's all personal, depending on your situation: consider renting if you're personal or financial situation is less stable. If, on the other hand, you are a person with a longer time horizon, buying becomes an option.

For purely financial analysis, I think it's tough to beat the NYTimes calculator:…
0 votes
Gloria Dinki…, Agent, Marietta, GA
Thu Jul 28, 2011
First take a look at your plans, how long you plan to live there, If you had to move in the next year or so would you be willing to come back to this place or would it be a good investment for you. Remember, when you rent, you are paying for something for someone else but if you buy then you are investing in you and your future. Also take into consideration that all of the updates and repairs will be your responsibility. If you think you would enjoy the joy of homeownership and being able to do what you want with the property , I would suggest buying.
Don't let the media mislead you into thinking not to buy. When the market turns and go's back up , and it will, you will have a great investment for you. Start small and look for a home that you can comfortably afford and in a great area or neighborhood and go for it ,then if or when you want to move up you will have something to put toward you dream home. I will be glad to help you find a great agent in your area. give me a call and good luck.
0 votes
Tonywahl, , Sunnyvale, CA
Wed Jul 27, 2011
I used to live in Noe Valley. I miss the place. Good ole 136th 27th St.

A couple of resources for you. I always like the NY Time Rent vs. Buy calculator. It graphically demonstrates the value proposition pretty well.…

Also, the Credit Sesame blog has some really good content and articles.

Good luck!
0 votes
Heather Wrig…, Agent, The Dalles, OR
Wed Jul 27, 2011
Not sure how the market in San Francisco is but I know here its better to buy. I say this because prices are at an all time low and interest rates are also really low! You can buy a house with as little as 3.5% down. Also with buying a house you can write off the property taxes and mortgage interest. Their are many pluses to buying a home. Another big factor to consider is the time you plan to stay in the area. If you plan on staying only a year or two I would say rent, otherwise buy! Good luck!
0 votes, Other Pro, Suitland, MD
Wed Jul 27, 2011
Trulia tells you, and updates quarterly:
0 votes
Ron Thomas, Agent, Fresno, CA
Tue Jul 26, 2011
The adage that they are not making any more land is particularly true in San Francisco:
You know that most of the Embarcadero wasn't there 200 years ago.
And Eastern Oregon is different, there is more land there now.
0 votes
Mimi Davies, Agent, Santa Monica, CA
Tue Jul 26, 2011

On the long run, as long as you have a steady job/income, you're better off buying then renting. Again, this is on the long run. It's up to you to evaluate the following factors:

- are you ready to make the investment?
- do you have some savings that you can allocate to this project?
- did you contact your bank or lending institutions for pre-qualification?
- do you know what type of property you want to buy?
- do you know where you want to buy? If so, start looking at local listings and see what the prices are
- if you're not sure where and what you can afford, hire a buyer's agent. Buyer agents don't charge you a penny since they're paid by the seller's agent.

As a first time home buyer, I garantee you will find having an agent very helpful!

Good luck and have fun home hunting.
0 votes
Maria Morton, Agent, Kansas City, MO
Sat Jul 16, 2011
In San Francisco? Buy. It's one of the areas where home values have done better than average through the recession. Parts of SF are still going up in value. Here is a page full of experts in San Francisco real estate
0 votes
Justin Ruzic…, Agent, Greenville, SC
Sat Jul 16, 2011
tough question...inflation is going to be a reality, which provides owning real property as an advantage, which would also increase costs of money, however price may be forced down at that point...
here is a good blog to read more.…

best of luck
0 votes
Robert Chome…, , San Diego, CA
Fri Jul 15, 2011
To add to the comments below, I think if you can get your mortgage+property taxes+home insurance close to what you would pay in rent, it makes huge sense:

1. You are locking in a payment for life with a 30 yrs fixed loan, where rents will inflate greatly over time for life time renters
2. When you buy you get to write off the mortgage interest and property taxes, which is a HUGE tax savings you don't get when you rent
3. You will be getting a fully amortizing loan where you will be paying a chunk of the loan principle every month, when you rent you are not paying off anything except the landlord mortgage
4. You can get the mortgage paid off one day and retire with a extremely low payment (just taxes + insurance + hoa + maintenance) - where people who rent and never buy will be stuck with a much higher rent than today down the road and will never have a low cost paid off home with no mortage

But the above points are only if the PITI is close to rent. If the PITI is way above rent, I would think twice. Because with ownership you have a lot of additional costs with maintaining a property and possibly large surprise costs like new roofs, fixing plumbing, electrical, fixing foundations, monthly water and garage bill, and not as much flexibility to move around as when you rent.
0 votes
Joanne Berna…, Agent, Northfield, NJ
Fri Jul 15, 2011
For the best solution to this problem you really need to consult a trusted financial advisor. Take the rental information of a few places you are considering and have the advisor look over your personal financials. They will be able to give you the advantages of the homeownership deductions for which you qualify and determine if that is the best course for you. You may find it is better to rent awhile until you build some reserves. You will have to pay for this analysis but it will be the best money you ever spent. It will help you avoid becoming another foreclosure statistic!
0 votes
Lamont Steph…, Agent, San Francisco, CA
Sat Jul 9, 2011
Caribbean Queen 10
As all of the answers have stated the answer to this question is largely dependent on your circumstance. Your question is an excellent one and not easy to answer. I use the rent vs. buy calculator(s) to try and suss this information out for myself.

A great rent vs buy calculator is here:

Hope this is helpful
0 votes
David Tapper, Agent, Burlingame, CA
Fri Jul 8, 2011
While I was growing up long before I ever thought of a career in real estate I remember hearing it's better to own your own home than pay for someones elses.

Whether this is right for you, I cannot answer. What are the risks involved. How much money will it take out of your pocket? How long to you plan on owning it. It's not always how much you pay, it's how long to you plan on living there.

If you are paying $2,500-$3K a month in rent, in 3 years you will have paid $90K +, with no tax write off, and no equity saved.

Talk to a few agents and get their take on the market. Try to get a referral from a friend, relative or co-worker.


0 votes
Matthew Goul…, Agent, San Francisco, CA
Fri Jul 8, 2011
Hi Carib,

As other have stated it depends on your circumstances and many factors. One really great tool I point my clients too is the Buy V' Own calculator on the New York Times because you can change so many of the variables. Give it a try with the link below.

Remeber to consider the rent that you would pay if you are planning on upgrading instead of your current rent and adjust the advance settings.

If you want to meet to evaluate over a coffee somwhere on 24th St drop me line.

0 votes
Mack McCoy, Agent, Seattle, WA
Fri Jul 8, 2011
Currently, we don't know what the future holds!

Ownership has privileges, and costs. It is generally cheaper, out-of-pocket, to rent; owners typically come out better in the long run.
0 votes
Dan Dodd, Agent, San Francisco, CA
Fri Jul 8, 2011

When looking at the long term benefits of buying over renting there is no question that buying is the way to go. There is one thing you can count on for sure. There is nobody making more land so it will continue to be in demand and will appreciate over the long term.

To answer the question specifically for your situation would require a more in depth conversation about your specific situation. Feel free to let me know if you would like to schedule a time to discuss your situation in detail with me.

Dan Dodd
Coldwell Banker
0 votes
Oggi Kashi, Agent, San Francisco, CA
Fri Jul 8, 2011
It's a no-brainer - If you can afford to buy right now, especially in Noe Valley, I would say Yes, it is financially smarter to buy.

Oggi Kashi
Paragon Real Estate Group
CA DRE 01844627
Web Reference:
0 votes
Nafiseh Lind…, Agent, San Francisco, CA
Fri Jul 8, 2011
The answer to that question will have to vary from person to person. It depends on your financial means and goals. it is a great time to buy in San Francisco. Prices are lower than they were a few years ago and the interest rates are great! Wheather the prices will go lower is any body's guess, but in this city things seem to be pretty stable. The rental market on the other hand is very hot and the prices seem to be on the rise. The City is one of the high rent areas. So if you have the money and the aspirations then by all means buy. But if you have any uncertainties about your own financial situation or anything else, then perhaps you should rent for a while.
0 votes
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