Being driven out of Bay Area

[2035]

As you may recall, I sold a home last year due to the expenses and headaches. I'm still not sorry I sold, as I was able to afford kitty daughter's cancer treatments, pay off debt and totally max out all retirement accounts. I just wish I hadn't taken the first thing I saw (was in escrow).

I love the area and my place is very comfortable. Although the landlady is MIA for weeks and doesn't do jacksh@t. I even paid for my own new carpet, and cabinet pairing when I moved in and have put up with inoperable appliances for months.

Now the scumlord raised my rent in retaliation for demanding repairs for things such as a non-functional oven among other things. I don't have the time or energy to sue her (even though she's been successfully sued). Too many greedy people are driving out working/middle class folks.

Here's my idea, I was thinking of saving again to buy something turnkey in an area where I might want to retire and rent it out, then endure Bay Area rents until I retire (May 2033 or 2014). I would buy 3-7 years - no rush after I have a 20% down and 6 month emergent fund. Seattle burbs (Seattle to $$$), Sedona, Austin

In the meantime, my new kitty daughters are a pain and joy and I love watching my investments grow as it means future security. Net worth hit 200k in November , now 401(k) alone is almost that.

Excuse my scattered thoughts, still taking all this in.


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[REWahoo]

As you may recall, I sold a home last year due to the expenses and headaches.
...
Here's my idea, I was thinking of saving again to buy something turnkey in an area where I might want to retire and rent it out...

Your idea seems to be in conflict with your first statement. The opportunity for 'expenses and headaches' will only be magnified by becoming an absentee landlord.

 

[2035]

Even if I use a management company?


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[REWahoo]

I'll let those experienced in landlording answer that one...

 

[FIREd]

Even if I use a management company?

Yes. I have had this set up for the past 3 years (rent in the Bay Area and rent out a property I own elsewhere), and I have come to the conclusion that this is just not worth the hassles. I am selling the property (well trying to anyways), and will reinvest the money in the stock market. Rents in the Bay Area go up much faster than pretty much anywhere else I know of, so the rents you can charge elsewhere won't keep up with yours here. Three years ago, the rent (before expenses) that I collected on my property represented 25% of my rent here. Now we are down to less than 20%.

 

[daylatedollarshort]

If it were me I'd probably just wait and look for a great deal on a rental or maybe move out of town further where the rents are cheaper. We're do for another housing bubble burst before too long.

Life / one's interests / maybe a significant other / family obligations can change a lot over that many years. It is pretty soon to buy a retirement home.

 

[rodi]

When we moved to CA my husband kept his rental in PA but hired a management company. We were less than thrilled with the management company to handle things in a manner to a) keep the tenant happy and b) keep the owner happy. We hired a different management company when our term was up... No improvement. We sold the property.

We're landlords now - but the situation is a little different, a detached 1 br house on our property. We have a mutual love fest with our tenants - they pay the rent promptly, are quiet and well behaved, really nice people... so we love them. We fix things promptly, give them rent slightly below market, etc... so they love us. No management company skimming off the top and no one being happy.

 

[wolf]

From reading your post. Do not think you have the "landlord" mentality.
Hiring outside mgmt. Sounds like an easy solution, but not really.

Figure, the outside mgmt. company takes a monthly %. Repairs are expensive if you cannot do it yourself. You will have pay for all repairs and
broken appliances.

Unless, rents are very good and steady, and turnover is low, you will probably just have more headaches and lose money.

Sorry to rain on your parade.

Landlord, with 30+ years experience.

Oh, agree with previous post, move to an area with lower rents.

 

[RunningBum]

I get the idea of buying where you might want to retire to lock in on real estate there, but there are drawbacks. Others have already pointed out the difficulties in being an absentee landlord. Another is that you don't even know which of those three places, or perhaps some other place that may suit your needs and interests 20 years later, that you would want to retire, not to mention the type of place you'd buy. Why lock in on one place before you have to? I know you could sell so you aren't really locked in, and maybe selling is your plan anyway and you just want to track the real estate market, but it still seems questionable to me.

Seems to me that you might be better off investing the money in something that might be related to one of these areas, or real estate in general. Perhaps a REIT? Or home builders? Haven't really thought about it so not sure if there is a better choice, or just invest in general since both the stock market and real estate will go up and probably is at least somewhat correlated.

 

[2035]

Well, I've lived in Seattle twice before and have friends there, but you're right folks...I don't have a landlord mentality.

Leaving job is not a option, since I'll never make a similar salary for what I do anywhere else (80k+, Admin Asst) and I'm grandfathered in the old traditional pension.

I have my health and family and zero debt, so l'm better off than most. I'll look for somewhere better at my leisure. Unfortunately, not driving severely limits my options

On the plus side, another tenant has launched a very public smear campaign against her with posters and everything...so I'm not alone. And the best part is it's all true.

Thanks again folks! Say, anyone happen to have the winning Powerball numbers for tonight (before 8pm PST)


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[REWahoo]

Say, anyone happen to have the winning Powerball numbers for tonight (before 8pm PST)

Check with these folks: American Society for Taxing the Mathematically Impaired

 

[daylatedollarshort]

2035 - I sent this link to one of my kids, and thought you might find it useful, too. It has average rents for a one bedroom apartment 1/2 mile near all the BART stations so "you can instantly see where you’ll have to live to get a decent deal on a one-bedroom apartment":

Renting a 1-bedroom apartment near BART in San Francisco | RadPad Blog: In the News and Making Moves

 

[haha]

2035 - I sent this link to one of my kids, and thought you might find it useful, too. It has average rents for a one bedroom apartment 1/2 mile near all the BART stations so "you can instantly see where you’ll have to live to get a decent deal on a one-bedroom apartment":

Renting a 1-bedroom apartment near BART in San Francisco | RadPad Blog: In the News and Making Moves

Great map. Rents appear better than I would have guessed.

Ha

 

[FIREd]

2035 - I sent this link to one of my kids, and thought you might find it useful, too. It has average rents for a one bedroom apartment 1/2 mile near all the BART stations so "you can instantly see where you’ll have to live to get a decent deal on a one-bedroom apartment":

Renting a 1-bedroom apartment near BART in San Francisco | RadPad Blog: In the News and Making Moves

Thanks for the map.

I am always looking for alternatives in case we can't afford downtown San Francisco anymore. In a prolonged market downturn, we'd probably have to cut our rent down to ~2.5K per month. It's nice to see that there are still some options in that price range. I have been looking up and down the coast mostly - from Santa Cruz to Sonoma County, but the affordable coastal locations put us pretty far from the city. Walnut Creek seems like a good option for access to restaurants, retail and healthcare - I should go explore that area.

 

[Brat]

Walnut Creek is a great community and it has BART service. An alternative, a bit further up the road is Pleasant Hill. I have shirt-tail relatives who live in Pleasanton west of 680, they like it very much, but Walnut Creek has much better shopping and access to high level health care.

 

[haha]

Thanks for the map.

I am always looking for alternatives in case we can't afford downtown San Francisco anymore. In a prolonged market downturn, we'd probably have to cut our rent down to ~2.5K per month. It's nice to see that there are still some options in that price range. I have been looking up and down the coast mostly - from Santa Cruz to Sonoma County, but the affordable coastal locations put us pretty far from the city. Walnut Creek seems like a good option for access to restaurants, retail and healthcare - I should go explore that area.

When I first moved to Bay Area I went to Walnut Creek. I hated it. It was hot, and I felt isolated. I moved across the hills to Berkeley and was much happier.

Totally different vibe too.

Ha

 

[NW-Bound]

Yesterday, in the Seattle Times, there was an article on a 1120-sq.ft. home in Ballard, a town across Lake Union outlet from Seattle, that went for $717K from an asking price of $559K.

Compared to the above, a waterfront home of 2500-3000-sq.ft. across the sound looks pretty cheap at $900K-1.5M. The difference? Lack of access to workplaces and well-paid jobs.

So, if you were retired and did not need to work, I would move to where I could get a larger and nicer place in less congested areas. Of course it's just me, as many others think of congested areas as being more lively and fun. I am just glad that my taste and lifestyle cost me less. If and whenever I wanted fun I would drive or take a ferry into town, but I would not want to live 24/7 in it.

PS. Recently, we passed through the Portland area and stayed the night at an RV campground across the Columbia River in Vancouver, WA. Drove into Portland, intending to revisit places we saw many years ago. After driving around for a while, looking for a place to park - every spot is now metered, and occupied - and finding that even parking garages were full, we got disappointed and drove home.

 

[FIREd]

Thanks Brat and haha. Different perspectives, I guess. I know Berkeley and I think it could be an option too, if the price is right. I'd definitely prefer a place where car usage can remain minimal and where A/C is not required.

 

[Brat]

Then join me in Portland. A/C is not required, restaurants are excellant, lots of shopping (not just chain stores), transit is very good.

 

[2035]

Living right next to Walnut Creek in a charming little town with everything nearby. I'm almost certain to return to Seattle or burbs when I stop working. Thankfully I don't need a car.


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[FIREd]

Then join me in Portland. A/C is not required, restaurants are excellant, lots of shopping (not just chain stores), transit is very good.

A few months ago, DW and I took one of those entertaining quizzes to determine the most suitable place for us to call home in the US and we both got Portland as our top choice. So it is on the short list.

 

[bld999]

"Car to Go" smart cars are parked all over north Seattle now, waiting for a customer to show up and activate them with a smart phone. Probably fills in the gaps for the occasional car need.

 

[Brat]

I have Zip Car and Car to Go within a long block (I live in Goose Hollow near Washington Park).

 

[Koolau]

The rents listed all over the bay area (for 1br) sort of knocked me out. I know the area is popular, but at least there is a fair amount of land around on which to build more housing. On Oahu, we don't get any more land (IIRC 597 Sq Mi total). That fact and the "paradise" tax would have made me think our rents would be closer to the Bay Area rents. We own, but our apartment would rent for $2500 or less (some for as low as $2100 - depending on amenities and view, e.g., the Pacific.) We have 1100 SF and 2br 2ba with a fantastic view. THE BUS service is relatively inexpensive and virtually ubiquitous on the Island so, though we own two cars, we could live without them - especially as retirees.

Bad as Oahu rents are, it seems there are places much worse - especially if you want to live close to the action (heh, heh, we're about 30 miles from the farthest point we could drive to - and I don't want to drive there (again.) Many rents are actually a "bargain" compared to the actual price if one were to buy. I think that tends to be fairly common when average housing cost is in the $700K range or higher (our condo was considerably less than that.)

But back to the OP's question. My suggestion is to get lucky and I'm only half joking, here. We did when we bought 30 years ago in anticipation of retirement from the mainland. We bought WITH a couple of tenants and kept them for 20 years. Then we hired a real estate management person who got us more rent and really looked after our investment for us. (DW and I often joked that our agent would never have rented to US!) We DID do serious research on her (one person). We figured that was much better than a big "firm" - also from what we heard from other folks, though I'm sure there are some great management companies. With one agent, there is one person to deal with and one person to "blame" if the ball is dropped. We could have never made the move had we not bought in when we did. Prices sky rocketed at the same time mainland (well, the heartland) seemed to just chug along, RE price-wise. It's a big decision and I emphasize that we were very LUCKY (or blessed, depending upon your view of life.) So, more than ever YMMV and good luck.