California renter able to buy a “second home” out of the area... (tenant, investment)
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I live in the Bay Area, work in education, have been a renter all my life and I certainly can’t afford to buy here now but I also wouldn’t want to. For the first time, I actually may very soon have the opportunity to buy but it will be out of state. I love Oregon and I love North Carolina. I am getting the best pre-qualification amount in North Carolina. I guess where I’m needing advice is, I won’t be able to live in that home just yet. I will rent it out for now. I don’t know if I’m being smart or NOT smart with my money. I want a home to have 1) an investment, 2) a place for my mom to retire, 3) I want to have a home on land where I can eventually have rescue animal, etc. I just know that there is a better quality of life and more of what I’m looking for there. However, if I don’t live in it now, I will have to manage it from across the county and so I just don’t know if I’m being foolish. I don’t want to miss my opportunity to buy a home. I’m almost 40 and I have not been able to buy until this point in my life and I just want to make sure I’m being smart.
I guess my biggest concern is not having a real estate investment. I feel like Asheville would be an excellent place to buy an investment home. And I do love it there. I also have four dogs and so being a renter isn’t always the most ideal because it isn’t that easy to just find a new rental. Also, if I stay in this area, I have to work my a** off just to pay our astronomical rents and so it seems like a move is inevitable and I don’t want to have to try to find yet another rental and convince yet another landlord that I’m an incredibly responsible dog mom/tenant.
I live in the Bay Area, work in education, have been a renter all my life and I certainly can’t afford to buy here now but I also wouldn’t want to. For the first time, I actually may very soon have the opportunity to buy but it will be out of state. I love Oregon and I love North Carolina . I am getting the best pre-qualification amount in North Carolina Can you clarify what this means? Do you mean "more home for the money?". I guess where I’m needing advice is, I won’t be able to live in that home just yet. I will rent it out for now. I don’t know if I’m being smart or NOT smart with my money. I want a home to have 1) an investment, 2) a place for my mom to retire, 3) I want to have a home on land where I can eventually have rescue animal, etc. I just know that there is a better quality of life and more of what I’m looking for there. However, if I don’t live in it now, I will have to manage it from across the county and so I just don’t know if I’m being foolish. I don’t want to miss my opportunity to buy a home. I’m almost 40 and I have not been able to buy until this point in my life and I just want to make sure I’m being smart.
Thank you for any advice!
If it were me I'd buy a Second Home in Oregon where I and my mom occasionally stay, but is also used occasionally as a rental.
Thank you both for your excellent advice! I will definitely be taking it into consideration! I do love the freedom of renting. The thing is that I have been working more and more jobs such as being an adjunct instructor that aren’t always loved by lenders and so I don’t want to totally take myself out of contention to be able to buy if I continue to work these “non traditional” jobs.
OP: I think it's a great idea to buy out-of-state and have a renter . . . IF you can take time off to go look at your investment and set up a plan for maintenance and rental assistance when you need it (I wouldn't hire someone to manage it all of the time - just when you need help). You will need to have a few handymen on call to deal with whatever comes up.
Don't let people scare you from fulfilling your dream of being a home-owner. I think it's a great plan. Just make sure to do plenty of research (on the neighborhoods, the geography (liquefaction zones, earthquake zones, flood zones, etc.).
Make sure that the house has "good bones" and is in good shape off the bat.
I’m getting pre-qualified in CA, OR and NC so I will see what the options are. Buying across the country has always been daunting to me. I can be in Oregon in 90 min on a plane and so that to me seems more doable to have a place that I can actually use or rent out :-) Or I could choose to save my money also but I will do what calls to me most :-) I’m trying to be really smart and not impulsive! Thank you for your input!!!
Location: Formerly Pleasanton Ca, now in Marietta Ga
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Here's my 2 cents which is probably what it's worth. I would hold off buying a place that you plan to move to unless you got such a screaming deal you can't loose no matter what happens.
I lived in the Bay Area all my life and know what you feel. That said I have been a real estate investor for over 35 years. I own over 22 properties out of state and have moved myself across the country to a place I've never lived before all by myself where I knew no one.
I will tell you this, owning property can be lucrative or can ruin you. Based on what you have said I think you might be heading towards the bad side.
So IMHO don't buy, you don't know enough about landlording and real estate yet.
If you plan to live there down the road-don't buy. When I moved from Ca to Atlanta I was going to buy a house to live in for cash. In the end I rented for 2 years. In those 2 years I can't believe how much my original vision changed. I thought I'd live in one area, but then decided to rent in another area. In that time I really learned about myself and also the area. I learned about neighborhoods, shopping areas, traffic patterns, etc. The third year I bought a house and am really happy with my decision but looking back if I had bought without renting I can see where things might not have worked out as well.
I am in the best financial shape inmy life and very happy with my choices, but looking back I can see where buying before renting would have been a big mistake.
A couple of other things-does you lender know you are buying the house non owner occupied, that it is an income property? If not and you rent it they have the ability to call the loan and you would be guilty of mortgage fraud. If you are buying it as a rental then the loan conditions will not be as good as owner occupied, higher rate and down payment. They will also question your ability as a landlord with no experience. Then when you decide to live in it you will have higher expenses than if you were owner occupied.
Thank you, aslowdodge. I really appreciate advice from someone in the business. I would consider buying a property as a vacation home in the PNW that I rent out occasionally but also use myself and that would be a home that I would buy only for the investment and probably to never live full-time but that may take away from my ability to buy the home I want to live in in the future, so I don’t know....and actually, aslowdodge, since you are seasoned in this and you know a little about my situation, how would you recommend I proceed into the home buying process? Move somewhere and then buy? Buy a pure investment property? I would love to know! Thank you!
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