Bay Area - To Buy a SFR or rent and invest?!

3 Replies

Hello Everyone!

My name is Nic and I am brand new to BP and RE investing. I was born and raised in the SF Bay Area. I am at a crossroads in my life and I'm hoping to get your thoughts. 

Situation - My (soon to be) wife and I are first time home buyers. For the past 6+ months we've been tirelessly touring SFR's trying to buy our first home. The entry price in the SF Bay Area (Redwood City > SF) for those familiar with the area is $1M-1.2M (I looked at a 1k sq ft 3/2 in San Mateo today for $1.1M and it needs about $100k of remolding). I discovered BP about two months ago and it's changed my perspective on RE and RE investing.

Buying a SFR and being tied to a $4500-5K mortgage payment seems absurd. Buying in the Bay Area is an appreciation play. If we were to buy in the Bay Area, there would not be much free capital to start investing in duplex/3plex/4plex's. I have two partners that want to start investing out-of-state in MFR's for cash flow.

Should I continue to rent and invest in MFR's or should I buy and live in a SFR? What would you consider when making a decision? Other?

Happy to answer any follow up questions. THANK YOU! 

I'd buy the house and worry later about investments. You will potentially end up paying a lot in rent for a comparable home anyways. Might as well pay it in mortgage, get tax benefits and build equity.

Welcome to B.P. This is a great place for questions and tons of education. I joined B.P approx 2yrs ago and I've learned a lot. I'm from S.F and have a SFR rental in Vallejo, Ca. Which is approx 30-35 away from S.F. It's currently a hot market. You have to buy in the right neighborhood when it comes to Vallejo. I'm also in the process of purchasing a off the market duplex in Vallejo. So Vallejo could be an area to consider. I'm not a expert but I'm willing to answer questions if I can. Not sure if this helps in current or future plans but I also just received my R.E license and will be working with an experienced team at Keller Williams in Walnut Creek @nic

@Nic S.

@Nic S.  

The question of rent vs own vs invest is always a complicated question and goes beyond what you would pay for rent vs a mortgage etc.

I ultimately look at the opportunity cost of your last banked dollar and start from there, then you can look at your lifestyle goals and future plans to get a clearer picture.