A lot of people say to not buy a property unless you will be there for 5+ years. Why is that? Looking at places in Sacremento, Seattle (cap hill), Bay Area (San Leandro vs Daly City vs Alameda), Austin/Dallas/Houston, Nashville, Charlotte, and Kansas City. TC 200k
I'd wait on California. Lots of California residents are going to be shocked at how much their tax bill is going to increase due to the new tax laws. Could see another exodus of high income residents moving to more accommodative tax states.
I bought my first SFH in San Leandro recently. Lmk if you have any questions about the neighborhoods. Similar TC to you.
Oh nice! Curious why you picked San Leandro? It seems like a very neighborhood area and presumably much safer than Oakland. I was debating getting a house close to bart so to at least be able to get into the city
I was raised in Oakland and lived everywhere from Lake Merritt to East Oakland and am familiar with the East Bay. My friends, relatives, and I have always known San Leandro to be the safer neighbor next to Oakland. (1-2 murders per year avg in city of almost 100K) In recent years, lots of new incoming techies have changed the bay, and assume that the East Bay sucks. Blind users and wealthy individuals have very uncompromising requirements in a new home, neighborhood or school. In my opinion, there are hidden gems here. Coming from a childhood with literally no resources, if I can do it in East Oakland, then your kids can definitely do well in SL. I mean, if you have the money then you can choose better East Bay alternatives in Pleasanton, Berkeley, Fremont. But there's no shame in buying in a decent and very livable place. Just know where to look. You'll be turned off if the first thing you see is the bad neighborhood of SL. But if you go to the good neighborhoods, it'll look nice. (writing next part of my comment below)
The answer is simple. Property tax, selling/buying commissions, possible risk of maintenance costs and possible risks of property price not growing makes it difficult to guarantee positive return within 5 years typically. Plus sometimes house is not a liquid assets which further reduces returns Of course in a bull market, and with the right knowledge of area several experts "flip" properties in even a couple of years and make profit. But I assume you are not one of those experts. Please search for new York times rent vs buy calculatior
You lose 5% commission in selling a home and a lot of bank and lawyer fees in buying. Also look at amortization schedules and for the first 7 years out of 30, you are basically just paying mortgage . You need the house prices to climb to break even if you leave soon after buying
What about property management for a place after you leave? Or is that just too much hassle usually? Because a lot of people seem to flip houses quickly (less than five years), and also people buy turnkey properties too
People who flip properties buy cheap and sell for more. They also account for closing costs when determining how much they'll have to sell it for to make a profit, before buying the property. The 5y thing is a general rule of about how long its take to make it worth to buy rather than just rent during that time. So the thinking is, if you're not going to live there at least 5 years, it'll be cheaper to just rent