This is a real estate topic I have been meaning to address in this blog for quite some time for my San Jose buyers, sellers and investors.
As should be expected, there is no definitive answer to that question. Both strategies bring substantial tax and financial benefits. The answer is directly connected to your short term and long term career and financial goals.
Here are some thoughts about renting your home in Silicon Valley:
1. Renting is for most home owners the first step of any real estate investment strategy. To put it simply, you may not have the option to buy based on your income, so you are only given the choice to rent your home. Renting however enables you to save more (for your first down payment for instance) and typically causes less strain on your monthly expenses, hence enabling you to build a good credit score providing your consumption does not exceed your means and you pay your bills on time.
2. Renting your house allows you to make an informed decision about the neighborhood you live in. Convenience to highways, distance from work and the quality of your social environment are essential factors to consider before purchasing your home in a given area.
3. Renting your home makes you mobile. In most cases, you can withdraw from a lease within one month or less sometimes depending on your relationship with your landlord. Renting in the Bay area is the ideal strategy for upwardly mobile family members, bound to see places as they climb the corporate ladder. Renting is also the best choice for families who encounter tough times and are mobile enough to relocate where work is available.
4. Renting is always cheaper in the short run, in particular in the Bay Area where house prices are among the highest in the US. The average monthly mortgage payment in San Jose can be estimated around $4K for an average price of a single family home in the San Jose area just above $500K. How does that compare with rental prices? As of April 2011, one can find a 4BR house in a very decent San Jose neighborhoods (such as Cambrian) for rent under $2.5K ! In the long run however, renting will always prove more expensive as your rent may end up reaching the level of a mortgage payment (further to annual rate increases) and you are unable to build equity on a place that you do not own.
Interested in buying a home in San Jose rather than renting ? Read on here
to find out more.
© Sophia Delacotte CDPE, SFR, CHS
San Jose Realtor
Cell: (408) 717-2575