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Rent vs Buy in Bay Area?

Hello! I'm currently starting to consider a home / condo purchase.

The stats:

Age: 29
Current Rent + Utilities: $700 / month (one room in 3br/2ba)
Current Income: $100k / yr
Total Savings: $175k (mix of taxable stock account, 401k, roth ira, etc, little liquid)

My goal is to move into a 1br or 2br with my boyfriend in the next year. His stats:

Age: 30
Yearly Income: $0 (looking for job that pays >$50k/yr)
Current Rent: $0 (lives with parents)
Total Savings: $0

I'd like to better understand the benefit, if there is any, of purchasing a house/condo. Every time I do the math, it seems to make more sense to rent, but then it always seems to make more sense to rent and clearly there are many benefits to home ownership. I don't think I'm ready to buy a house and deal with taking care of the property, so I'd likely be looking at a condo. However, HOA seem quite expensive on top of a mortgage. It looks like the minimum cost of a condo would be $550k - $650k plus taxes, interest and HOA, vs renting $1.5k - $2k per month.

Can someone please tell me why I should consider purchasing versus renting for the foreseeable future?








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July 28 2012 - San Mateo
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Answers (4)

Profile picture for SteadyState
Economically, for the bay area, many have reached the same conclusion as you have: Renting is cheaper than Buying by a long shot! Anyone (any agent) that tells you different is looking after her/himself (actually their commission) and not you.

Having said that, if you want a home for lifestyle purposes - that is you are not concerned that the home can go down in value and that you will pay more for the home than renting you can do so, in which case, enjoy your home!
Home buying is a lifestyle choice in the Bay area. It does NOT generally have overall economic benefits in the Bay area.
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July 30 2012
Profile picture for workabee
Don't buy a house with your zero income spoiled boyfriend. Be better to buy a house with someone like me who has a job and abs of steel. wink
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July 29 2012
Profile picture for Go Huskers
I can't add much to the rent vs buy but I have an opinion as to whether you should do it with a 30 year old boyfriend that has no job and lives with his parents. Would you like to hear that opinion?
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July 28 2012
I could go on for hours about the benefits of owning. I could also go on for hours about the headaches of owning.

Are you happy renting? If you are, I'd say keep doing it. If you hate having to worry about landlords and room-mates, I'd say it's time to think about buying.

For someone in your situation (if they were thinking about buying), I'd recommend that they consider the coast from Half Moon Bay up to Pacifica. Reason being, those locations hold great value. They are cheaper than the rest of the peninsula, and more pleasant (to me anyway). You could spend $600k and get a home in San Mateo's Village, Parkside or Shoreview. That would also buy a home in the Homeview or Sterling Downs areas of Belmont. You'll be fortunate to find 1600sqft at that price. But, if you take the same amount out to HMB you'll get more house (and less competition) for your money.

Hope this helps.
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July 28 2012
 
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Rent vs Buy in Bay Area?
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July 30 2012 | 4 answers
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