To Rent or To Buy? That is the Question

Buying a home is one of life’s biggest investment decisions. Depending on where you live, an average home can range from a couple of hundred thousand dollars or a few million dollars. Here in California, home prices have increased significantly over the years to create a state of renter more than owners. If you’re still renting, no doubt you’re aware of just how much money you give to your landlord or property management company; money which will no longer benefit you once it leaves your pocket. It’s one thing to keep track of your monthly rental payment, but when you think about how much rent you pay over your lifetime, you can see just how much you lose out from not being a home owner.

Do you know how much rent you will pay in a year? In 10 years? In 30? Gaining some specific insights to just how much a single renter can expect pay out in rent within the California market can help you understand the importance of planning for homeownership now, instead of waiting for some day.  Using a conservative increase assumption of rent in various Bay Area cities, the following table shows how much rent you will potentially pay over a 10 year and 30 year period.

These Bay Area Cities are fast becoming metros filled with renters. Instead of handing over all this money to someone else, consider investing in home ownership now while the market is poised to provide excellent opportunities to do so. The California Association of Realtors recently released its 2019 Economic & Market Forecast.  This report shows that while we are in a renter majority state, there’re still opportunities to invest in home ownership.

Our economy is our biggest asset which can help towards owning a home. California unemployment is down to just 3.7%, the lowest it’s been in 40 years, while job growth is climbing, up by 1.7% as of September 2018.  Inflation has also remained low, with a 2.7% increase from August 2017- August 2018.  Interest rates are still historically low, with the current Fed Funds Rate being at 2.25% and weekly fixed mortgage rate at 4.71%. While rates are still low, they are expected to rise; investing in a home now will ensure a good, low interest rate.

While there are other expenses when it comes to owning a home, the benefits outweigh the costs for most families. For starters, with your own mortgage payment you no longer need to worry about rental increases. Even if you rent in an area with rent control, you can still face up to a 3% increase in your monthly rental payment each year. With a standard 30-year mortgage, your payment is set, until/unless you choose to make a change and refinance. You can rely on the security of knowing your monthly payment won’t increase unexpectedly. In addition to this, each payment you make comes back to you in the future through equity build-up. Owning a home is an excellent investment opportunity to build your personal wealth.

A home is an excellent investment for the long term.  Now’s an ideal time to shift your dollars from renting to owning. It’s also an ideal time to expand your investment portfolio with rental property. Take the next step towards investing in a home and call me, Thuy Tran, at 408.459.8881, and let’s get the conversation started. Find more information including featured listings at my website,, and contact me today.

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