Renting vs. Buying in the San Francisco Bay Area

Renting vs. Buying in the San Francisco Bay Area

It’s the ultimate question when it comes to the Bay Area housing market. Is renting better than buying? You’ll probably hear a lot of people talking about the benefits on both sides, but what is the right choice for you? Should you be looking for a great Bay area apartment rental or trying to get a mortgage for your dream home? Here are some considerations to keep in mind when it comes to renting vs. buying in the Bay area.


Naturally, your major consideration when it comes to renting vs. buying is cost. San Francisco Bay Area homes can be expensive, but is renting always the better financial option? It depends on where you plan to rent. One rule of thumb to use is price-to-rent ratio. Divide the price of the property you are looking to buy by the annual perspective rent of the rental option. If the result is a ratio of lower than 20 percent, you should probably be more inclined to buy. If it’s higher, this might be the time to rent.


Keep in mind that you want your monthly home costs to be 30 percent or less of your monthly salary. If a mortgage is going to put you above that number, renting may be a safer option.

Credit Rating

The better your credit rating, the better the terms will be on the mortgage for your Bay Area home. You can save a lot of money by renting now and taking a few years to build your credit before seeking a mortgage.

Future Plans

How long do you plan to stay in the Bay Area? Are you sure you are going to put down roots here, or is it school or a job bringing you to this location? If you think you may want or need to move in the next five years or so, it usually doesn’t make sense to invest in buying a property.

Interest Rates

Interest rates may not significantly affect the cost of your rental, but it will affect how much you end up paying for your mortgage, and a few points of interest can really add up over the life of a 30-year mortgage loan. If the market has been trending in the wrong direction, you may want to rent now and give interest rates time to settle down before you start seeking a mortgage to buy a home.

Also, remember that renting puts much less responsibility on you as far as care for your home. Your landlord is responsible for most of the upkeep of your apartment and possibly some utilities as well. You don’t have to worry about paying for security or property taxes or homeowners’ insurance — although you will most likely want to invest in renters’ insurance to protect your personal property. Homeownership can bring a lot of hassles with it that you may not want to deal with right now.

Finally, keep in mind that renting is not just “throwing away money” every month. The money you save by renting or not paying a high mortgage is money you can save or invest to pay dividends for you later.

For more ideas about renting in the Bay Area, get in touch with us today.

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I want to say I really appreciate our property manager Bruce. He is fantastic! He is very responsive to questions and concerns.

Kristine A.. , Rewood Apartments