San Francisco housing is, again, sky high. Did it ever really come down?  We are fortunate to live in an area of the country that is nearly “recession proof,” and due to geographic, political and other restrictions has a constricted supply of housing. That’s if you already own. If you don’t own, it can be very scary. A tiny little place in San Francisco can cost a small fortune, and you may think: wow this home can not simply keep appreciating! But then on the other hand if you rent, you are subject to ever-increasing rents (in non-rent control buildings) and in rent control buildings, some lack of care (to the say the least).

Rent or Buy a Home in San FranciscoYou’re in a pickle: should you rent, or should you buy? Should you stay or should you go? This month’s San Francisco Tax Tips bulletin investigates this issue in detail. You can read it, here.  As accountants, we’d advise you look to the annual rent-to-purchase price ratio in the San Francisco Bay Area.   Generally speaking, a lower rent-to-price ratio favors renting, and a higher one favors buying.

Then there’s the move factor. Perhaps today you are young, single, or at least childless.  Tomorrow you might not be. So you might “buy” a home or condo in San Francisco, only to turn around an “sell” it just a few years hence. That’s not usually a great idea; generally you want to stay in your home at least five years. So if you plan to move, soon, then of course renting is better than buying.

Tax-wise, of course, there are many advantages to buying because the taxes are tax-deductible.  Even better the profit from selling a home often is exempt for capital gains; contact a tax professional to determine your actual situation as this, of course, varies! We are a top San Francisco service for individual tax, and we advise on this issue all the time.

Should you rent or should you buy? Should you stay or should you go. 1) Consult our informative tax bulletin, and 2) call us for a free tax consultation.  We can advise on nearly any complex situation.  We love tax!