Renting vs. buying

In general, if you’re planning to spend several years in the Bay Area, it usually makes sense to buy. California has one of the highest costs of living, and the money spent on rent can instead be spent on a mortgage to help you accumulate equity over time. Historically, real estate is one of the best paths to wealth in the United States, and the wealthiest Americans own property.

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If you’re not sure whether to call the Bay Area home, renting may be better for you. Until you’ve lived here a while, renting may allow you to get to know the Bay Area better, and find out where your favorite areas are. Another benefit of renting is that you don’t have to cover major repairs — like replacement of the air conditioner or water heater — that comes with home ownership.

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In summary, the benefits of owning include:

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• Building equity as you pay down a mortgage over time. You have the potential to own a home in 20 to 30 years.

• Potential for wealth and financial stability. Bay Area homes have a long-term record of appreciation. Most of the financially affluent people in the United States own or invest in real estate.

• Freedom to change or make improvements to the property (as long as it’s within community rules).

• A voice in the Homeowner Association (if the property has one), and input into the future of the community.

• Tax benefits to owning a home. Mortgage interest and other deductions can help offset income taxes. Consult with a CPA or a tax advisor for your specific situation.

The benefits of renting are:

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• Seeing what areas of California you like best, without being anchored to a specific location.

• There’s no expensive down payment (other than the security deposit required to rent a home).

• No large repair bills as the landlord is typically responsible for maintaining the property.

• No property taxes, and in most cases you don’t pay monthly Homeowner Association dues.

• It’s easier to move from place to place, or take a job in a different area.