Renting vs Buying in Bay Area

For SFH in Newark or parts of Fremont @200K cash should be doable (including loan fees etc).

I might buy in Mtn House when I retire, of if both persons of couple can work from home. Otherwise it’s too far for someone working in SV.

1 Like

Yep. I think that’s what we are seeing in Santa Clara, Milpitas, Fremont, Newark right now. Bigger buyer pool with FOMO.


You all overthink things. Think of all the people you know. All of them. Your coworkers. Your friends from school. Your neighbors. Of all those people, identify all of the successful ones. I will be shocked if you find that many of them are lifelong renters. Just doesn’t happen. Their money simply goes out and does not “come back” in any shape or form.


At current prices, your calculations confirm a perception that has been steadily gaining ground. Looking at the numbers, it seems it’ll be even better to buy two Daly City rentals than 1 DC & 1 Fremont. What do you think?

At current prices, buying Cupertino SFH seems more of an emotional decision than a financial one.

A lot of posters have shared personal anecdotes on how their mortgages are lower than current market rent - what they are forgetting is that we are discussing current market situation here so PITI for a property bought 5-10yrs ago doesn’t count.

Thanks for putting some numbers behind the theory. I would favor scenario #2.

1 Like

I bought mine 2.5 years back.

I could not agree more with this.

I bought my first condo in the Bay Area on a 70K salary during the downturn. It was very possible then! The place I bought didn’t have any real issues besides bad carpet and dirt! It had been sitting on the market for months. I was young and had few requirements (which made it much easier. Nowadays I consider many more factors, and I know what I like and dislike.)

My friends who were making much more money than me (100-150K+) thought I was crazy and that it was a huge risk. They were similar to your friend. They also imagined a future in which they’d always have jobs that enabled them to qualify for a mortgage.

It is a difference in mentality. It was risk aversion that drove me to buy, not risk taking. I could imagine all sorts of worst case scenarios, so I thought if I CAN qualify for a mortgage and buy, then I should buy right away. I felt that in the future, I could get laid off or something could happen where I wouldn’t be able to get a bank to give me a mortgage. Initially it wasn’t cheaper and I was okay with that.


Here is the enemy …Yimbys unite…Fight these anti growth groups that fight even affordable housing

Berkeley 4th Street developer plans to use new housing law to bypass review

A sign claiming the historical significance of the West Berkeley Shellmound hangs at a parking lot across from Spenger’s restaurant on Fourth Street in Berkeley. Opponents of a housing complex say the site is a sacred Ohlone Indian burial site. Photo: Paul Chinn, The Chronicle
Photo: Paul Chinn, The Chronicle
IMAGE 2 OF 6 A sign claiming the historical significance of the West Berkeley Shellmound hangs at a parking lot across from Spenger’s restaurant on Fourth Street in Berkeley. Opponents of a housing complex say the site is … more
The battle over a proposed housing project on a parking lot across the street from Spenger’s Fresh Fish Grotto restaurant in West Berkeley escalated Thursday when the builder became the first in California to invoke a new state law that allows residential developers to bypass local environmental review processes in exchange for providing more affordable units.

On Thursday, developer Blake Griggs Properties of Danville, after five years of contentious debate and political squabbling, said it would invoke SB35 at 1900 Fourth St… American Indian groups, as well as North Berkeley antidevelopment forces, have long opposed building on the 2.2-acre parcel, contending it is the site of an Ohlone burial ground.

The new state law, authored by state Sen. Scott Wiener of San Francisco, allows an over-the-counter approval process for zoning-compliant projects that provide certain levels of affordable housing. In Berkeley — as well as in San Francisco and Oakland — a development must be at least 50 percent affordable to take advantage of the law.

Blake Griggs plans to construct a 260-unit apartment complex, half of which would be affordable to households earning 80 percent of area median income, which is $80,400 for a family of four. The development will also have 27,000 square feet of retail, a 7,000-square-foot park and a small community center.

Passed in January, SB35 “establishes a streamlined, ministerial review process for certain multifamily affordable housing projects that are proposed in local jurisdictions that have not met regional housing needs,” according to the legislative summary.

Projects that comply with the law’s requirements are guaranteed approval within 180 days, unheard of in a region where even straightforward housing developments can take three or four years.

I am not knocking on your decision to buy. It was the right decision at the time. But there are two major deviances between your situation and myo’s scenarios

  1. Prices have climbed even in past 2.5yrs. The Cupertino house in scenario 1 would have been available for 30-40% less then

  2. You moved from Sunnyvale to Fremont. We are discussing buying in Cupertino vs Fremont via these scenarios and you chose Fremont so essentially scenario 2.


Never considered that.

Yea, 2 x DC is definitely one of the choice. It will be vary case to case. In this case, I intentionally did that so that I don’t chase the cashflow - instead - diversified in Fremont which has some potential for appreciation. Also for my exercise, you might buy a house in Fremont that you might want to consider retiring after kids go to college, in that case, you don’t care so much about cash flow, but look for house with nice street (maybe not the best school) and keep the low tax base after 12 years.

Also as others have pointed out, there are some human / psychological factor in living in rental house. Not sure my SO might even let me consider this.


That’s called pride of ownership.

There is another benefit of the two-rentals solution. If one of the spouses hit hard time, or simply doesn’t want to work 9-5 anymore, it may become hard to come up with the payment for a 2m mortgage. That’s 10k a month plus property tax.

With 2 rentals you have a lot more flexibility. You can sell one and use the proceeds to pay many years’ rent in Cupertino. Or you can move into one of the rentals and halve your payment.

If all your money is tied up in one single Cupertino house, it’s hard to sell half a house.


Would you consider renting in Palo Alto then? You have an SF house and a SJ house that can act as your 2 rental solution.

No, not renting in PA.

There is one more solution: to have so much money to not care. Still working on it. :smile:


This all day long. There is a lot to be said for a sense of security. After all, that sense of security is why immigrants of all stripes come to this country. At the same time, there is a huge sense of security to owning your home — especially if one invests the time/resources to own one’s home outright. Doing so is a completely liberating experience ---- and of course prop 13 works to hold the tax bill down … play the long game - be patient.

Yes. And the most financially secure ones you will not even be able to identify because they lead such modest lifestyles that it is impossible to tell. :slight_smile:

Landlording is not for everyone, so I suppose we are talking about a strategy not for the masses but only for the financially keen few who are willing to face the daunting task of being a landlord without being a homeowner first. When this brave soul has the means to provide housing stability for himself, he not only chooses not to secure that stability but rather take on the additional responsibility of providing housing for someone else just to make some extra cash. I think these unselfish souls are hard to come by these days… :smile:


Oxymoron? :wink:

Property owner != homeowner

Homeowner is the primary home owner

Lighten up, it’s just a joke. Notice I winked :wink:

Landlording is only hard if you don’t use property manager. Otherwise it’s just as easy as owning a stock.

@myo is a very seasoned landlord. In his case, he’s pondering whether to buy a SFH in Cupertino or PA for schools’ sake, or rent there and invest the money into rentals instead.

I agree for people new to buying properties, jumping straight into landlording seems daunting. However we are seeing more and more tools to make it easier. We have sites that let people buy houses 1000 miles away and fully manages for them. We have crowdfunding sites. Given the high prices of BA RE, I think more and more people will jump straight to landlording.