Home › Forums › Financial Markets/Economics › Buy a house in Austin and rent out Oside house?
- This topic has 14 replies, 9 voices, and was last updated 7 years, 6 months ago by Escoguy.
November 10, 2015 at 9:33 AM #21770November 10, 2015 at 9:38 AM #791141
Remember that kids will lose in-state access to the U of C system if you move to Texas. Of course, UT is also reputed to be good.November 10, 2015 at 7:03 PM #791153
What do your kids think? I’d guess the high school years are the toughest and moving them to a totally new place and trying to make new friends in a new, totally different city/town/environment is going make you the least popular parent in the home.
For that reason alone, I’d probably not move if I was in your shoes…
The 19 year old should be in college/working so won’t matter, but the others, could end worst off (grades suffer, acting out, etc).November 10, 2015 at 7:22 PM #791154fredo4Participant
Surprisingly, they are all up for moving and are excited about it. And you’re right. 19 yr old is up in S.F. going to school and living with her aunt and uncle.So no problem there.November 10, 2015 at 8:34 PM #791159paramountParticipant
[quote=joec]What do your kids think? I’d guess the high school years are the toughest and moving them to a totally new place and trying to make new friends in a new, totally different city/town/environment is going make you the least popular parent in the home.
For that reason alone, I’d probably not move if I was in your shoes…
The 19 year old should be in college/working so won’t matter, but the others, could end worst off (grades suffer, acting out, etc).[/quote]
It sounded like a good idea until I read the above; and RE markets are local but would you be buying high even in Texas?
What about a quick flip? Could be profitable and remember being a landlord can be a real PIA.November 10, 2015 at 9:41 PM #791168FlyerInHiGuest
Stay where family is.
Travel back and forth costs money.November 10, 2015 at 11:20 PM #791170outtamojoParticipant
I think that if you move to Texas but think you might want to live in CA. again in the future as a homeowner you should try hard to keep the Oceanside house.
If poorly-rated public schools in Oceanside are an issue then, Temecula?November 11, 2015 at 5:59 AM #791171GataParticipant
We were in your shoes a year ago. Hubby who grew up in SD when CA was the Golden State decided enough is enough and we started looking at Austin. Granted we have a second home in a tropical paradise, so scorching summers wouldn’t bother us. We bought a place in Austin with straight cash, in a great school district. You are right property taxes are 2-3%, very high for CA standards. However, because home values are lower we are paying less here than in our home in SD. Also, public schools here are as good as private schools, and I am very picky about where my daughter goes to school (she was going to private school in Del Mar before). There are also amazing private schools. Now Texas is not CA, so if I didn’t have a second home near the beach I would be missing the ocean. UT is a great school, diverse but still catering to Texan residents ( unlike UC, sadly). I would say keep your home in Oceanside until you guys settle in Austin just to make sure everybody is happy. My husband and daughter prefer it here over SD. I like the ocean, but CA’s is too cold anyway, so HI is better for me. Financially, Austin is way better than SD any day of the week. Just a teaser: my SUV in SD cost me $700 to register the first year, here it is only $62.50 (and there are no penalties for late registration). There is no perfect place, so you’ll have to weigh in all options and go for what suits your family circumstances. Austin is getting expensive though, so be ready to pay asking price and quickly. But we see CA license plates almost daily, it’s so funny. We have met people who came here from CA and different States for the same reasons mentioned about CA: lower cost of living but also sustainable future (water wise), employment future for kids, and relative safety (don’t mess with TX lol). And all of them are upper middle class or well off, despite what you see in the media. To give you an example, one of our friends traded an apartment in Manhattan with spectacular views for a home in the coveted 78704 zip code in Austin. Btw, there is abundant rain here, we just got 17 inches in two days last week (no flooding though but something to watch for when house hunting here ). Good luck to y’all!!November 11, 2015 at 7:45 AM #791172
Or just drive an older diesel car in CA that’s cheap to register and produced before the smog cutoff… 🙂
And I’m not sure if every idiot off the street being able to arm him/herself qualifies as “safety”. Gun laws in California aren’t that onerous but tend to weed the overly eager weekend warriors out.
And hahahahahahaha. They really gave up an apartment in Manhattan to buy a house in Austin?November 11, 2015 at 7:57 AM #791173paramountParticipant
[quote=Gata]We were in your shoes a year ago. Hubby who grew up in SD when CA was the Golden State decided enough is enough and we started looking at Austin. Good luck to y’all!![/quote]
Thanks for sharing…November 11, 2015 at 7:05 PM #791208
Another point to consider is Texas has no state income tax. I’ve known and have family moved to no income state tax places, but they all make in the 300+ – million rates so it’s an easier “financial” decision when you don’t pay another 30k – 100k in just state income taxes.
Personally, I’d keep the place in CA unless I needed to sell because as expensive as it is here, there are places in LA, Bay Area, NY, pretty much all the large cities in Asia (Tokyo, Hong Kong, Beijing, Shanghai, Singapore) where people are happy to park some cash outside (for their kids too to go to school). SD isn’t bay area, but it’s “good enough” for most of those folks…and getting into UCB and UCLA is hard nowadays, even with them opening it up a lot more.
In terms of supply, the builders simply don’t build SFHs unless they are sold pretty much. There is no competition in some areas (think Pardee and CV) so good luck trying to expect prices to fall when, as mentioned in the other thread, housing construction is probably half of what it was in the past and the millennials are starting to hit the start a family age…
Safer to keep it for now and rent in Austin to see how it goes.November 12, 2015 at 7:58 AM #791225HLSParticipant
IMO an asset bubble has been created by low rates.
What do you think will happen if mortgage rates move up substantially.
Most people scrape by with a down payment and need to qualify for a loan.
There will be an adjustment period, but at current prices, it will be much harder to qualify for a loan. You think prices will go higher ?
There will always be people who must sell at whatever the market is due to death, job loss/transfer, divorce etc.
There will always be others who will wait for prices to go up before they will sell.
People who are myopic about Southern CA real estate don’t understand the national scope of home prices AND the quality of life in so many other places at higher/better standards of living.
Given the fact that you are considering leaving this area; listen to spouse and sell now.
Take the tax free gain and move.
(Take the money and run)
Austin & Oceanside are not the only 2 places in the country to consider living. If Texas doesn’t work you’ll find somewhere else.
The net return on a $500,000 home here coupled with being an absentee landlord wouldn’t be attractive to me.
Being a landlord is a great road to wealth but I think many people are delusional about the potential for appreciation coupled with true carrying costs for maintenance/vacancies etc.
and the headaches of being an absentee landlord.
Having the cash will give you options.
Decide later if you want to pay cash in TX or
buy rentals there (or someplace else)or just sit on the cash.
The cash flow and cap rates are much more attractive elsewhere.
The tax free gain option could go away.November 12, 2015 at 8:09 AM #791227
If you’re a bear on So Cal property, what would be wrong with selling now (at peak), RENTING for a few years, while buying income property at lower prices out of state to pay some of the rental costs?November 12, 2015 at 6:35 PM #791255
I think prop 13 changes real estate as an asset class here a bit. I don’t know if they also changed the law already on the 500k tax free gains, but when it was first allowed, some of my friend’s parents was selling places and moving to another to repeat the process to cash out…bad thing is all the places they sold are worth more now, but still…
Unlike Texas with unlimited land and near no appreciation, I think flu posted a chart that any pullback in the 80s, 90s, 2000s came back with stronger increases in silicon valley.
Yes, all this can change and maybe it’s different this time, maybe a nuke can go off or parts of CA will fall in the ocean, but at the end of the day, I certainly wouldn’t be too worried if you only have 1 place which you live in.
All this doesn’t matter much to me since I can’t buy or sell anything, am stuck with my owner occupied place for a long while and that’s it…November 13, 2015 at 7:30 PM #791265EscoguyParticipant
My brother and sister and aunt live/work in Austin.
Property taxes are very high. Traffic is tough. Avoid south and East Austin. Schools are actually quite bad in some areas. Getting into UT can take a lot of work and commitment even though my niece got a full scholarship there (sophomore now).
My best advice would be for you to just go there for two-three weeks and look around, visit schools, see actual homes in person. The impression you get online can be very different, especially during the dry/cold Texas winter.
Having grown up in central Texas during my teenage years, I didn’t suffer from it but I knew I would go to college and while I could have stayed there, it wasn’t in my plans.
Homes in nicer neighborhoods in Austin start at 500K with 10-12K/year in property taxes. By comparison the average middle income family in California pays less in property and income taxes. Appreciation in Texas is usually modest.
You will get more space. It’s a good quality of life but more focused on a somewhat different set of activities. Even when the economy is slow restaurants are full.
Personally, I think you should rent out the place here and try it for a year. If things work out well, you can always sell in up to three years without losing the tax free exemption amount. You just need to have lived there two of the last five years.
Good luck with your decision!
As far as Houston, the neighborhoods there are all over the map. There are very exclusive enclaves which are unbelievable but most mid market neighborhoods aren’t that appealing. Do be careful as the last time there was a major oil slump in 1986, real estate in Texas tanked. There are only the first signs of a slowdown now, but anyone who remembers the 80s slump will know that things could deteriorate significantly in a few short years. That was one of the first times a region in the US had large amounts of jingle mail.
The lower energy prices will keep interest rates lower and actually keep California housing prices rising for the mid term.
- You must be logged in to reply to this topic.