The concern about correlation to tech industry is valid. When it rains it pours, and that can hit real estate liquidity and/or valuation. The last time there was a big bust, the pain was not evenly spread, with greater percentage drops in the farther suburbs and the rougher neighborhoods.Currently mulling a home purchase in the outskirts of the bay area.
Household pays $42k/year in rent.
Would you buy a basic SFH at $800k-1M or go allocate more into stocks and hold off and put away more seedcorn for a larger down payment? I’m sick of paying this much rent.
I’m also concerned about being this correlated with tech industry if I buy in the bay. I could sell off some shares but prefer not to.
Have you considered renting a SFH?
Don't be sick about throwing away money on rent. If you were to buy a property and then rent it out to someone like yourself:
a) Pay $1M to buy house. Pay 10K/yr in prop tax. Pay for insurance. Pay for upkeep on consumables (roof, HVAC, repainting, double-paned windows that fog up, etc).
Collect maybe 60K/yr in rent, but probably closer to 50K? Net maybe 40K/yr?
b) Put the $1M in a bank CD, collect 40K
If you're the renter, you can move if the neighbors are terrible, if the neighborhood goes downhill, if you find you want to live in a different school zone, etc
Also, you don't have kids yet, and your kids aren't school-age. Life after you have kids can be very different than life before kids. Both in terms of lifestyle and in terms of your personal priorities. That's just another reason to rent so you have enhanced flexibility to move.
Statistics: Posted by random_walker_77 — Wed Nov 27, 2024 4:24 am