Buying a house or moving to west coast
Want to buy a house in Michigan now while I can still afford. Because every year, $$>10k goes in the drain by renting. But also preparing for FAANG targeting next year which would require moving out of my new house. If I move to CA/WA it might take another few years to be able to afford a house. Also if I have a baby by then, it might make it even harder to save enough for a house. Spouse might need to find a job too. Would it be a good decision to buy a house in Michigan now and having to sell it in a year? FAANG people, were you able to buy a house and really get a better living standard after moving to SF or similar high COL places?
Why not buy a house and rent it when/if you leave? Let someone pay off your mortgage for you.
Is that a sustainable plan? What would the tenants do if they need me as a landlord to fix and maintain things while I'm away out of state permanently? And is it common for people to rent houses with ~$2000 every month?
You’d have to look at how much rent is fair for the house, and see if it covers based on your mortgage. Overall though its a fairly common idea though, buying a place and renting it when you move on to the next place. As far as maintenance you can use someone local you know or if you want to forget about it you can have a property management company take care of it for ~10% of the rent.
Decide tour priorities. Do you want house and good wlb (because of baby) and arguably in general more happiness ? Or you want big name in resume.. move to hustle bustle of Bay area and delaying your buying a house plan etc for a few years? And even if you are able to buy a house say at least after 2-3 years.. not as good and big as you'd at other places. Decide whats more important fir you all of that or a name in your resume.
Houses are expensive even for FAANG employees here. Even 2b condos cost over 1MM if you don't want crazy commute.
Given the TC at FAANG is a few times higher than other places, how long do you think it takes to save up for a good house by living frugally? BTW in Michigan, a good house in a good area may still cause you to drive >45 minutes each way. I won't call it a crazy commute unless it is above an hour each way
Depending on your definition of a good house. A decent single family house with 3+ bedrooms in a good school district with 1 way 45min commute at rush hour can easily cost you 2M. 20% down pay is 400K. If your TC is 300k you can probably save 100k if you live frugally (taxes are high here)
I wouldn’t buy if you want FAANG on your resume and plan to move to the Bay Area. Be prepared for your standard of living to go down. Traffic is worse, housing is incredibly expensive and you have to be careful about school districts when you have kids. Work for FAANG for a few years and move back. Then buy a house in the Midwest in cash or get an awesome mansion by the lake. That’s my plan.
Thanks for sharing. Do you know people who left FAANG and went back to Midwest to buy a nice house or may be a lakeside mansion? Asking because I think big cities make it harder to move out from after family settles down for a while
Also I heard similar plan from a friend who is also at G like you. Do these plans get executed actually?
If you are spending only 10k on rent I would stay away from buying a home. You would pay close to that on home insurance + hoa + taxes(the hidden costs that people forget to associate homeowneship to). If your betting on home appreciation over time, mid west is not going to make u a ton of money. You are going to loose 6% on commissions and also ur closing costs on mortgage. On trying to save the 10k rent you would end up with a lot more hassle. Buy only if you plan to stay put at a place for a long time and if you are in need of a big place.
If you buy a house in Michigan, you’ll most probably get stuck there for next 10 years. Think about it and decide.
No, it would not be a good decision to sell in <1 year