Help me figure out if I can make this work... (San Diego: rentals, insurance)

[Spannerhead]

Understood.

Alright; thanks guys. Looks like the Bay area is definitely out for us.

[Tulemutt]

Originally Posted by Spannerhead

My wife is currently against the move but I'm trying to weigh everything out just to get better educated about these things.

So, my question is: are you looking for a divorce?

[Spannerhead]

Har har

No, but she's a rational person and can be persuaded depending on the merits. Just trying to keep our options open.

[shooting4life]

Originally Posted by capoeira

Many people bought before the big price runups. Some people in SF are under rent control so their rent has not gone up over the years. Also people have dramatically different expectations of what is expected. I have seen 1500 sq. ft. houses here described as "huge". When I was looking for houses in the Atlanta suburbs a real estate agent described a 2400 sq. ft. house as "tiny". Personal living space here is very small compared to the rest of the USA but not nearly as bad as places like Tokyo or Hong Kong.

If you were to move out to the Bay area you would most probably be looking for a 2 bedroom condo in your price range.

I agree, it is about adjusting expectations.

I recently purchased a home, it is 1,600 sq feet and over 60 years old, in a lower middle class area with average schools and an hour drive to work during commute time. This home is worth 500k in the Bay Area.

People who live here their entire lives see this as normal, but it's not. My plan is to pay the house off quickly and retire young (55, house will be paid off when I'm 45), out of state where my retirement and rent from current home will provide my wife and I with a very comfortable retirement. Something that would not be possible if we rented.

[Ruth4Truth]

Would she be able to work part-time? That would make the move doable.

3-br. rentals are hard to find anywhere. Since the real estate market imploded, all those people who lost their homes are now renting, so nothing's available anywhere, it's not just a Bay Area problem. Also, a lot of the foreclosed homes were bought by corporate entities who created real estate investment trusts (REIT's) with them, and are trading those packages on the stock market. That's why you see so many rent-to-own properties, instead of straight rentals. The competition for rentals is very stiff, as a result. I don't know what the people who lose out in those rental compatitions, do, where they go. It's alarming.

[Fran66]

Originally Posted by shooting4life

Stay where you are. Especially since you would go from owning a home to renting here. You would need to make a considerable amount more (like your wife working) for you to be able to afford to buy here.

I agree with the above. While living so close to San Francisco and the ocean must sound exciting to you, it's not if there isn't enough money to make ends meet.

As for your wife working PT -- she'd have to get a job-- good luck trying to find one.

Vacation in CA. Much more fun.

[Spannerhead]

Originally Posted by shooting4life

I agree, it is about adjusting expectations.

I recently purchased a home, it is 1,600 sq feet and over 60 years old, in a lower middle class area with average schools and an hour drive to work during commute time. This home is worth 500k in the Bay Area.

People who live here their entire lives see this as normal, but it's not

That's incredible... $500K would buy a mansion with a view on top of Lookout Mountain (affluent suburb) around here.

Originally Posted by Ruth4Truth

Would she be able to work part-time? That would make the move doable.

That would be a tough sell. She's talked about going back to work, but there would have to be some pretty incredible redeeming qualities to the Bay area (think shining crime-free paradise) to make that adjustment in addition to all the others.

3-br. rentals are hard to find anywhere. Since the real estate market imploded, all those people who lost their homes are now renting, so nothing's available anywhere, it's not just a Bay Area problem. Also, a lot of the foreclosed homes were bought by corporate entities who created real estate investment trusts (REIT's) with them, and are trading those packages on the stock market. That's why you see so many rent-to-own properties, instead of straight rentals. The competition for rentals is very stiff, as a result. I don't know what the people who lose out in those rental compatitions, do, where they go. It's alarming.

The reason we'd be renting is that we have our current mortgage here in TN in addition to a rental property where we used to live in NC. I can't really see a bank letting us take out a 3rd mortgage, especially just starting a new job, and when our income is so marginal.

Thanks again for the input.

[smashystyle]

I don't think you could sustain your same standard of living on $115k. That said, I think people exaggerate the cost of living a lot. Most households in the Bay Area get by on less than $115k. Even in San Mateo County -- where San Bruno is and which is wealthier than average in the area -- the median household income (as of the 2010 census) was $87,751. That said, the way people get by is to live in way smaller/less nice housing than you're used to, by paying a high percentage of their income for housing, or by commuting a long way. One thing to consider is that San Bruno is on a BART line, so you could commute in from the East Bay where housing is generally more affordable. Here's an example of a house for rent pretty close to BART in Pleasant Hill, which has pretty good (though not great) schools: 3 Lone Oak Ct, Pleasant Hill, CA 94523 is For Rent - Zillow But that's an hour and six-minute BART ride each way.

[Spannerhead]

Thanks for the link and the input. FWIW I was anticipating the fact that our standard of living would decrease a bit (renting a 3B, 2BA townhome instead of owning a 3B, 3BA house, for example). The goal would have to take a small standard of living hit but keep the expense percentages roughly the same vis-a-vis our income, which would make it easier to pay down our debt (since that number is fixed) and give us a leg up salary-wise for the next career move. As someone else pointed out elsewhere, it's easier to control expenses than income. But if we can't even maintain a basic SOL, then it's a no-go.

[Ruth4Truth]

Originally Posted by Spannerhead

The reason we'd be renting is that we have our current mortgage here in TN in addition to a rental property where we used to live in NC. I can't really see a bank letting us take out a 3rd mortgage, especially just starting a new job, and when our income is so marginal.

Thanks again for the input.

Wait, what? Why wouldn't you sell your place in TN? Planning to return, someday? Pay off those rentals in 15 years instead of 30, and you'll have a nice chunk of change coming in. It's easier than you think, by paying a little extra on the principal every month. You'd be surprised how that adds up.