You have to look at this old question from a different perspective. When people purchase a house with a home loan, they enter in a rent-to-buy agreement with the bank. They stand a high chance of owning that property if they make all the payments on time or if they pay their mortgage faster. So between renting and buying there is not much difference, except that when you rent you don’t become the new owner at the end of the lease contract. The same happens if you default on your mortgage, except that you may still recover part of the money invested, if the property increased in value.
Not much difference? Other than the two huge differences you mentioned, the application of loan is more complicated than application for rent. Also the responsibilities of maintenance and repairs of the house, and tax treatment of rent and mortgage is different.
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Very few people default in Bay Area. Even if you have trouble paying banks have all the incentives to work with you to avoid foreclosure.
Of course, the issue is more complex. I’m sorry if I oversimplified it. I’m sure that many people weigh in a lot on the benefits of renting vs owning. There is nothing wrong in renting if someone enjoys that lifestyle and doesn’t fret over what the future may have in store for them. While both renting and buying with a home loan are depriving you of financial freedom for a while, I find a mortgage more burdening than a monthly rent.
True, if one is unconcerned about the future renting in the ba makes perfect sense but after renting for thirty years and paying many rent increases what does a renter have in her pocket? Versus a buyer, locks in her “rent” for thirty years, with only predictable small increases for expenses, and at the end of thirty years stops paying rent essentially, thereby padding her pockets with monthly cash and she now owns a valuable asset. Best thing for most people is probably rent ba and invest outside ba in real estate. Ba is a mature market, that’s not where one goes for big growth and gains, although ba is a unique mature market and in demand. What you want is a developing market, that’s where you find consistent double digit annual appreciation. Inland Empire comes to mind. How does Scottsdale look? Cheerio old chum