I'm moving from amzn to goog next month. Currently have a home in a Seattle sub urb with 300k mortgage debt. Wondering if purchasing a second home (townhome) in Bay area for 1M(800k mortgage+200k down payment) would be a good move or not. I plan on renting my Seattle home which makes me wonder if I'm betting too much on housing market (1m+ mortgage). We're in DINK situation with total family income of 450k. Thoughts on renting vs buying in Bay area in my situation?
Well, I am. 3145
buy if u have down payment ready. even if market goes bad u have job at google so u r safe. maintaining living here and renting in Seattle can be too much Hassel sometimes.
I’d suggest start with renting near an area you are interested, start looking at houses and understand the area. Usually that’d take a few months. Then buy later in the year or early next year if you still want to. You may end up realizing you hate the Bay and want to move back or hate being an landlord. Who knows
Thanks for the input
Rental is done on schedule D and not part of your deduction. If you already rent it and low debt ratio it should not hurt.
I thought property taxes and mortgage interest for rental property can't be deducted. Also with the new tax code for deduction on mortgage interest, the limit is 750k mortgage debt. Is this a limit on property that is primary residence? Or is it a sum of mortgage debt on primary and rental property?
It can be deducted, and so can depreciation over 27 years, along with other business expense like insurance, gardening, etc. Remember if you rent it out it is like a business instead of personal living expenses. It is no itemized deduction on schedule A
Do you have to pay CA state tax on your Seattle rental income ?
Just keep in mind there's no rent control in most of the Bay. Your rent can go up hugely year to year
Any thoughts on commute times using shuttle from Livermore/Dublin?
I have been considering the Bayshores community by Willam Lyon homes. Any insights into the community/builder?
The average life return of an invest (consider crisis) is between 7% and 9% per year adjusted for inflation. In my case, the difference between rent and mortgage would be about 2k/month (3k rent and 5k in mortgage + property tax + hoa) for a 1m house. If I invest this at the lower bound of 7% plus the required downpayment this gives me 3M at 30 years. This means that if I am willing to bet on the house market going up by 300% over the next 30 years (plus inflation) it makes sense to buy a house otherwise it makes sense to rent. I chose to rent and invest. But this decision and the math for it varies by person. As of it being the second house, what matters is the % of total worth holder on it.
you can’t rent a million dollar home for 3k
What kind of one million dollar house can you rent for $3k? Where in the Bay Area are you talking about? You will be looking at $5k AT LEAST not including utilities and internet