[(former)FormerSanDiegan]

So you already have a rental property, so you should fully understand all the tax implications, misc costs, and hassles.

I would not trade potential future losses in Washington for potential future losses in San Diego, but it does seem to make sense to me for you to sell your current house in order to have some dry powder for your purchase down here sometime in 2009 or so.

By the way, where are you finding houses in San Diego for 12x annual rent? That’s about 8.3% gross return. Most places I am familiar with would be more like ~6% gross or at least 15x annual rent.

Seems to me that a place where one could find 12x annual rent would would likely be cheaper (on a monthly basis) to own than rent, with interest rates around 6%. A home priced at 12x annual rent might imply a 400K property that rents at 2777/month. PITI with 20% down would be about $2400 per month. Before taking into account tax savings that is considerably cheaper than renting.

If I could truly find something at 12x annual rent, I would consider buying it.

[(former)FormerSanDiegan]

So you already have a rental property, so you should fully understand all the tax implications, misc costs, and hassles.

I would not trade potential future losses in Washington for potential future losses in San Diego, but it does seem to make sense to me for you to sell your current house in order to have some dry powder for your purchase down here sometime in 2009 or so.

By the way, where are you finding houses in San Diego for 12x annual rent? That’s about 8.3% gross return. Most places I am familiar with would be more like ~6% gross or at least 15x annual rent.

Seems to me that a place where one could find 12x annual rent would would likely be cheaper (on a monthly basis) to own than rent, with interest rates around 6%. A home priced at 12x annual rent might imply a 400K property that rents at 2777/month. PITI with 20% down would be about $2400 per month. Before taking into account tax savings that is considerably cheaper than renting.

If I could truly find something at 12x annual rent, I would consider buying it.

[(former)FormerSanDiegan]

So you already have a rental property, so you should fully understand all the tax implications, misc costs, and hassles.

I would not trade potential future losses in Washington for potential future losses in San Diego, but it does seem to make sense to me for you to sell your current house in order to have some dry powder for your purchase down here sometime in 2009 or so.

By the way, where are you finding houses in San Diego for 12x annual rent? That’s about 8.3% gross return. Most places I am familiar with would be more like ~6% gross or at least 15x annual rent.

Seems to me that a place where one could find 12x annual rent would would likely be cheaper (on a monthly basis) to own than rent, with interest rates around 6%. A home priced at 12x annual rent might imply a 400K property that rents at 2777/month. PITI with 20% down would be about $2400 per month. Before taking into account tax savings that is considerably cheaper than renting.

If I could truly find something at 12x annual rent, I would consider buying it.

[(former)FormerSanDiegan]

So you already have a rental property, so you should fully understand all the tax implications, misc costs, and hassles.

I would not trade potential future losses in Washington for potential future losses in San Diego, but it does seem to make sense to me for you to sell your current house in order to have some dry powder for your purchase down here sometime in 2009 or so.

By the way, where are you finding houses in San Diego for 12x annual rent? That’s about 8.3% gross return. Most places I am familiar with would be more like ~6% gross or at least 15x annual rent.

Seems to me that a place where one could find 12x annual rent would would likely be cheaper (on a monthly basis) to own than rent, with interest rates around 6%. A home priced at 12x annual rent might imply a 400K property that rents at 2777/month. PITI with 20% down would be about $2400 per month. Before taking into account tax savings that is considerably cheaper than renting.

If I could truly find something at 12x annual rent, I would consider buying it.

[(former)FormerSanDiegan]

So you already have a rental property, so you should fully understand all the tax implications, misc costs, and hassles.

I would not trade potential future losses in Washington for potential future losses in San Diego, but it does seem to make sense to me for you to sell your current house in order to have some dry powder for your purchase down here sometime in 2009 or so.

By the way, where are you finding houses in San Diego for 12x annual rent? That’s about 8.3% gross return. Most places I am familiar with would be more like ~6% gross or at least 15x annual rent.

Seems to me that a place where one could find 12x annual rent would would likely be cheaper (on a monthly basis) to own than rent, with interest rates around 6%. A home priced at 12x annual rent might imply a 400K property that rents at 2777/month. PITI with 20% down would be about $2400 per month. Before taking into account tax savings that is considerably cheaper than renting.

If I could truly find something at 12x annual rent, I would consider buying it.

[(former)FormerSanDiegan]

I would not be looking to buy immediately in San Diego. It is typically better to move, rent a while, and do your homeowrk with your feet on the ground here first. There are a lot of subtleties to real estate that are hard to glean from web searches and first impressions.

Now, about that house in Washington… I cannot speak to any opinion as to whether houses are due for a 10% or more decline there. But I’d like to offer a counter-opinion that we rarely get on this board.
As a landlord, who was in a similar position to you 6 years ago, I would look at it this way: Accounting for maintenance, vacancies, and management, your negative will likely average roughly 500 per month over the next 5-6 years (probably more like 600-700 per month initially, then decreasing with rent increases). After 5 or 6 years rents are likely to increase to the point where you break even. You will likely break even after taxes much sooner (maybe even in year 1) because of the depreciation write-off.

So, fast forward about 6 years … AT that point you will have a property that is likely to be breaking even or slightly positive cash flow. Your tenants will be paying it off over the next 20-25 years. All that for the equivalent of a monthly payment on a new car for the next 6 years.
Of course, I am assuming that rents increase at 3-4% per year and that we are not entering the next great depression.
The real question is whether or not you are suited to be a property owner or whether you might be better off selling and investing the 600 bucks a month in something else.

Others might opt to avoid the whole landlord thing or investment alternatives and just enjoy a new 5-series every few years.

[(former)FormerSanDiegan]

I would not be looking to buy immediately in San Diego. It is typically better to move, rent a while, and do your homeowrk with your feet on the ground here first. There are a lot of subtleties to real estate that are hard to glean from web searches and first impressions.

Now, about that house in Washington… I cannot speak to any opinion as to whether houses are due for a 10% or more decline there. But I’d like to offer a counter-opinion that we rarely get on this board.
As a landlord, who was in a similar position to you 6 years ago, I would look at it this way: Accounting for maintenance, vacancies, and management, your negative will likely average roughly 500 per month over the next 5-6 years (probably more like 600-700 per month initially, then decreasing with rent increases). After 5 or 6 years rents are likely to increase to the point where you break even. You will likely break even after taxes much sooner (maybe even in year 1) because of the depreciation write-off.

So, fast forward about 6 years … AT that point you will have a property that is likely to be breaking even or slightly positive cash flow. Your tenants will be paying it off over the next 20-25 years. All that for the equivalent of a monthly payment on a new car for the next 6 years.
Of course, I am assuming that rents increase at 3-4% per year and that we are not entering the next great depression.
The real question is whether or not you are suited to be a property owner or whether you might be better off selling and investing the 600 bucks a month in something else.

Others might opt to avoid the whole landlord thing or investment alternatives and just enjoy a new 5-series every few years.

[(former)FormerSanDiegan]

I would not be looking to buy immediately in San Diego. It is typically better to move, rent a while, and do your homeowrk with your feet on the ground here first. There are a lot of subtleties to real estate that are hard to glean from web searches and first impressions.

Now, about that house in Washington… I cannot speak to any opinion as to whether houses are due for a 10% or more decline there. But I’d like to offer a counter-opinion that we rarely get on this board.
As a landlord, who was in a similar position to you 6 years ago, I would look at it this way: Accounting for maintenance, vacancies, and management, your negative will likely average roughly 500 per month over the next 5-6 years (probably more like 600-700 per month initially, then decreasing with rent increases). After 5 or 6 years rents are likely to increase to the point where you break even. You will likely break even after taxes much sooner (maybe even in year 1) because of the depreciation write-off.

So, fast forward about 6 years … AT that point you will have a property that is likely to be breaking even or slightly positive cash flow. Your tenants will be paying it off over the next 20-25 years. All that for the equivalent of a monthly payment on a new car for the next 6 years.
Of course, I am assuming that rents increase at 3-4% per year and that we are not entering the next great depression.
The real question is whether or not you are suited to be a property owner or whether you might be better off selling and investing the 600 bucks a month in something else.

Others might opt to avoid the whole landlord thing or investment alternatives and just enjoy a new 5-series every few years.

[(former)FormerSanDiegan]

I would not be looking to buy immediately in San Diego. It is typically better to move, rent a while, and do your homeowrk with your feet on the ground here first. There are a lot of subtleties to real estate that are hard to glean from web searches and first impressions.

Now, about that house in Washington… I cannot speak to any opinion as to whether houses are due for a 10% or more decline there. But I’d like to offer a counter-opinion that we rarely get on this board.
As a landlord, who was in a similar position to you 6 years ago, I would look at it this way: Accounting for maintenance, vacancies, and management, your negative will likely average roughly 500 per month over the next 5-6 years (probably more like 600-700 per month initially, then decreasing with rent increases). After 5 or 6 years rents are likely to increase to the point where you break even. You will likely break even after taxes much sooner (maybe even in year 1) because of the depreciation write-off.

So, fast forward about 6 years … AT that point you will have a property that is likely to be breaking even or slightly positive cash flow. Your tenants will be paying it off over the next 20-25 years. All that for the equivalent of a monthly payment on a new car for the next 6 years.
Of course, I am assuming that rents increase at 3-4% per year and that we are not entering the next great depression.
The real question is whether or not you are suited to be a property owner or whether you might be better off selling and investing the 600 bucks a month in something else.

Others might opt to avoid the whole landlord thing or investment alternatives and just enjoy a new 5-series every few years.

[(former)FormerSanDiegan]

I would not be looking to buy immediately in San Diego. It is typically better to move, rent a while, and do your homeowrk with your feet on the ground here first. There are a lot of subtleties to real estate that are hard to glean from web searches and first impressions.

Now, about that house in Washington… I cannot speak to any opinion as to whether houses are due for a 10% or more decline there. But I’d like to offer a counter-opinion that we rarely get on this board.
As a landlord, who was in a similar position to you 6 years ago, I would look at it this way: Accounting for maintenance, vacancies, and management, your negative will likely average roughly 500 per month over the next 5-6 years (probably more like 600-700 per month initially, then decreasing with rent increases). After 5 or 6 years rents are likely to increase to the point where you break even. You will likely break even after taxes much sooner (maybe even in year 1) because of the depreciation write-off.

So, fast forward about 6 years … AT that point you will have a property that is likely to be breaking even or slightly positive cash flow. Your tenants will be paying it off over the next 20-25 years. All that for the equivalent of a monthly payment on a new car for the next 6 years.
Of course, I am assuming that rents increase at 3-4% per year and that we are not entering the next great depression.
The real question is whether or not you are suited to be a property owner or whether you might be better off selling and investing the 600 bucks a month in something else.

Others might opt to avoid the whole landlord thing or investment alternatives and just enjoy a new 5-series every few years.

[(former)FormerSanDiegan]

… you must make about $250K a year, and 20K is a pocket change for you.

Huh ? Since when is 8% of one’s income pocket change ?

Anyway, home prices in San Diego are broadly lower than 3 years ago. In 6 months the seasonal factors will be in a buyer’s favor. Someone buying in Fall 2008 will be in a substantially better position than someone who bought in 2004, 2005, 2006, or 2007. I don’t think it will be the bottom this Fall, but I believe that someone buying late this year or in 2009 will NOT regret it in 10 years.

[(former)FormerSanDiegan]

… you must make about $250K a year, and 20K is a pocket change for you.

Huh ? Since when is 8% of one’s income pocket change ?

Anyway, home prices in San Diego are broadly lower than 3 years ago. In 6 months the seasonal factors will be in a buyer’s favor. Someone buying in Fall 2008 will be in a substantially better position than someone who bought in 2004, 2005, 2006, or 2007. I don’t think it will be the bottom this Fall, but I believe that someone buying late this year or in 2009 will NOT regret it in 10 years.

[(former)FormerSanDiegan]

… you must make about $250K a year, and 20K is a pocket change for you.

Huh ? Since when is 8% of one’s income pocket change ?

Anyway, home prices in San Diego are broadly lower than 3 years ago. In 6 months the seasonal factors will be in a buyer’s favor. Someone buying in Fall 2008 will be in a substantially better position than someone who bought in 2004, 2005, 2006, or 2007. I don’t think it will be the bottom this Fall, but I believe that someone buying late this year or in 2009 will NOT regret it in 10 years.

[(former)FormerSanDiegan]

… you must make about $250K a year, and 20K is a pocket change for you.

Huh ? Since when is 8% of one’s income pocket change ?

Anyway, home prices in San Diego are broadly lower than 3 years ago. In 6 months the seasonal factors will be in a buyer’s favor. Someone buying in Fall 2008 will be in a substantially better position than someone who bought in 2004, 2005, 2006, or 2007. I don’t think it will be the bottom this Fall, but I believe that someone buying late this year or in 2009 will NOT regret it in 10 years.

[(former)FormerSanDiegan]

… you must make about $250K a year, and 20K is a pocket change for you.

Huh ? Since when is 8% of one’s income pocket change ?

Anyway, home prices in San Diego are broadly lower than 3 years ago. In 6 months the seasonal factors will be in a buyer’s favor. Someone buying in Fall 2008 will be in a substantially better position than someone who bought in 2004, 2005, 2006, or 2007. I don’t think it will be the bottom this Fall, but I believe that someone buying late this year or in 2009 will NOT regret it in 10 years.

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