To buy or not buy? (San Diego, Vista: apartments, renting, HOA)

[metoque]

Originally Posted by bloom

Georgey Costanza strategy

You're either a realtor or a delusional homeowner

[mandasand]

Originally Posted by oddstray

I have no answers to your questions. Just things that might be useful to think about...

Be aware that we now have a glut of lawyers. A career in law will probably not significantly add to your income for the next several years. (I have a co-worker whose son has recently passed the bar exam. He's struggling to find work - any work.)

You moved for your job - how secure is your job?

Buy versus rent? How flexible do you need to be?

The idea that your house is an investment opportunity is completely different from the idea that your house is where you live. If your house is your investment, what happens when you need to sell your house quickly to reap a gain from that investment?

Thanks for the comments. We are NOT at all worried about his potential for a career in law. He is a 20-year military veteran, all of which has been in law enforcement. This experience is a DRAMATIC difference than your friends' son just finishing law school.

Is any job secure? No. So that is something to always be prepared for. But, I have much more job potential in the San Diego area than in Sacramento. I work in biotech.

We are flexible. And, I think by investment is that we could sell it in 5 years and make a few bucks. I have learned through the years of buying an selling many properties, that buying a home is not a solid investment anymore. Actually, all investments have risks. We bought our house in Sacramento 2 years ago for $285,000. We could put it on the market today and easily get $365,000. Next year, closer to Spring when the market heats up more, we could easily ask for $390,000. That means we've made over $100k on our house in 2 years. We know that buying in SD will be a challenge because prices are much higher here than where our other house is. But, I think maybe the investment is a little less risky than Sacramento (the economy is not as good there versus SF or SoCal).

Does this help to clarify anything?

[bloom]

Originally Posted by metoque

You're either a realtor or a delusional homeowner

strikes two and three, metoque

[mandasand]

I also wanted to give some more kudos to my hubby. He is sort of a Renaissance Man. He has two degrees, one in Criminal Justice/forensics and another in Chemistry. He is also a certified tax preparer. He's the smartest cop I know.

I think we'll be fine career-wise. We've both worked really hard to get where we are at today in terms of career. I have my master's degree and he'll have his JD. I can't imagine we'll end up in a situation where we would not be able to buy a house. The question is, should we buy next year or wait? Our discussion yesterday was he still is not sure if we should buy or wait. He wants to make a practical decision.

[metoque]

Originally Posted by bloom

strikes two and three, metoque

Ah, then you just don't understand economics. Thanks for clarifying.

[metoque]

Originally Posted by mandasand

We are flexible. And, I think by investment is that we could sell it in 5 years and make a few bucks. I have learned through the years of buying an selling many properties, that buying a home is not a solid investment anymore. Actually, all investments have risks. We bought our house in Sacramento 2 years ago for $285,000. We could put it on the market today and easily get $365,000. Next year, closer to Spring when the market heats up more, we could easily ask for $390,000. That means we've made over $100k on our house in 2 years. We know that buying in SD will be a challenge because prices are much higher here than where our other house is. But, I think maybe the investment is a little less risky than Sacramento (the economy is not as good there versus SF or SoCal).

Does this help to clarify anything?

Like you said, your experience with real estate investing is no longer applicable in today's market. However, it's hard to predict anything these days with how much the gov't has their hands in the mix and not allowing housing prices to reach equilibrium. For that reason alone, I would not buy any home "as an investment" is if it's a true investment property where you're making positive rental cash flow from it. If you're planning on being in the home for 10 years or more, different story...but only being in it for 5 years is a big risk in my opinion.

[NYSD1995]

You guys seem like you have your act together. If you really can find the right house at the right price, I don't really see any harm. Alternatively you guys could rent for another 5 years and buy a bigger, nicer home and I don't see any real difference. IMO the ship for fast appreciation is about sailed and I think most people see this market as moving slowly to begin with.

The real issue I have with buying now is that nothing for sale and what is for sale seems very expensive. I feel like I'm just choosing between a bunch of houses I don't want to buy.

I don't see it staying like this forever, I think a lot of people are just staying put because they either have to (can't afford to move up/out) or don't want to try and stretch again into the move-up homes. So you're waiting for people to move or die, or buying from a flipper.

[metoque]

Originally Posted by metoque

Like you said, your experience with real estate investing is no longer applicable in today's market. However, it's hard to predict anything these days with how much the gov't has their hands in the mix and not allowing housing prices to reach equilibrium. For that reason alone, I would not buy any home "as an investment" is if it's a true investment property where you're making positive rental cash flow from it. If you're planning on being in the home for 10 years or more, different story...but only being in it for 5 years is a big risk in my opinion.

I meant to say "For that reason alone, I would not buy any home "as an investment" unless it's a true investment property where you're making positive rental cash flow from it."

[Pedro2000]

Originally Posted by mandasand

Thanks for the question. We want kids. We both have waited to start a family. I'm 34 and he's 38. Obviously, since his second career will be law and I moved us for my job, I have no desire to stay home with the kids. I can see our income growing significantly in the next 10 years. My husband is very practical. The only debt we have is our current mortgage. We own our cars, have no credit cards and always have money in the bank. My husband has two mindsets: he wants a house that is an investment, but also prefers a house that we pay the mortgage off. I think that he would lean more towards an investment now and in 5-10 years we buy a home we would pay the mortgage off.

You missed one huge aspect of money in this assessment. Kids. Kids are expensive. And if you both work, that means day care, pre-school, after school care and so on. As kids get older, they might be into sports or drama or theatre or dancing or whatever. None of that is free. Or you are on some team that requires uniforms, travel, etc.

So your income might grow significantly in the next ten years, but then again, who knows how much it will as others have said, there is already a glut of lawyers. And kids cost money. People watching kids costs money. Kids activities cost money. Saving for kids college costs money. And sometimes people have to make sacrifices for their kids. Many times it's the mothers who do that. Other times nobody makes sacrifices and the kids suffer.

Do you have family in the area that can help with childcare and so on? If not, you will have to really think about various decisions. And will you have kids soon, wait a few more years? It all depends. Buy a nice house in a decent area with crappy schools will mean trying to sell that house in 5+ years and buying another house in a better school district. And with the prices of SD homes these days, I doubt it'll be a profit making situation.

[thelopez2]

Originally Posted by metoque

I meant to say "For that reason alone, I would not buy any home "as an investment" unless it's a true investment property where you're making positive rental cash flow from it."

That sounds better, you started to sound like a conspiracy nut.

Originally Posted by mandasand

We considered renting out our house in NorCal but we are worried about the liability if it doesn't rent. It's a very large home with 5 bedrooms so it would most likely rent to a family. Rent prices in the area aren't that great so we would barely break even every month. If we sell, we would walk away with over $100k.

I see, you already made the money in appreciation, take the money and run, don't get greedy. It is to easy for the market to turn down and you start losing money. You might be about to sell it now to an investor and do a rent back. I'm curious how much do you think it would rent for?