All my friends have bought houses. Some of them have bought houses worth 2.4M in Cupertino. Most of them are Indians on H1B visa and not Green Card in sight!
Are Bay Area prices sustainable? Am I being unnecessarily paranoid?
My neighbor owns 15 houses and lives in Europe most the year. I'm working on the same path (may buy their homes in the next year or two, we're in discussions).
Also, you have to be prepared to sue, file liens, and use sheriff evictions.
Everything is easier if you're local. If your investment is large enough, flying in to deal with your properties is a reasonable business expense (I wouldn't do it outside setting up a company and having general liability in addition to your normal house insurance).
Some folks were able to walk away with $1M cash and just rented after. The rent to home price ratio is crazy in Toronto and they were able to rent a home for $3000 that would cost $6000 in mortgage payments.
I work (in an office, not remote, mind you) at a tech company in the Research Triangle area of North Carolina. Most of the people I know also work in tech companies. In fact, outside of state government and the school systems, the major employers around here are all tech companies and research universities. You can easily have an entire career in tech, working in-person, in good jobs doing cool stuff. And the cost of living around here is a tiny fraction of what you'd pay in the SF/NY/LA/Seattle.
If you want to live in [big overpriced city] because you like said big overpriced city, feel free to do so. But HN really needs to get over this ridiculous idea that big, overpriced cities are the only place to have a tech career.
There are places in middle America with open positions for many people that have relatively inexpensive living costs in comparison to places like SV, Seattle, New York, and so on.
Indianapolis has some of the cheapest housing in the US, but it also has very low salaries for software professionals. I have a lot of family there, and I just can't move back. Sure, it's nice to own your entire house for only $150k, but the pay cut means you'll spend longer paying it off than you thought.
Recommending people move to Gary or Kenosha simply to avoid living in Chicago is pretty silly and a vast over-reaction. Markets have priced in the fiscal issues and Chicago is still cheaper than comparable cities for tech professionals. Even with increased taxes, Chicago will remain cheaper than New York, Seattle, Denver, Los Angeles, San Francisco, Boston and DC.
Pretty much every city/state in the US has a pension crisis and will require tax increases. Would you recommend people avoid these places?:
- Houston - https://www.houstonchronicle.com/news/politics/houston/artic...
- Dallas - https://www.dallasnews.com/news/dallas-city-hall/2017/11/13/...
- All of California - http://www.sacbee.com/opinion/editorials/article199693069.ht...
- Seattle - http://www.foxnews.com/opinion/2017/08/22/what-seattle-incom...
Always prefer to live in places that do not have basket case governments that kick the can down the road for the next guy to fix. Previous generations avoided fixing the problems by anticipating that new blood would bring in their money, and they could grow their way out of trouble. Don't be the sucker that comes in to a new situation who is then expected to carry old baggage.
I don't think Illinois is bad enough that anyone should move away if they already live there, but their choices are to move away, become more politically active, or be left holding the bag for prior decades of bad government.
It's like any other relationship. You're going to have an easier time with someone who seems capable of dealing with their own problems, than with the person who pushes responsibility for their problems on to you.
If you simply must live in a particular place, you need to account for bad government as a price premium. If you intend to work in California, you need to increase your salary demands, to account for its insufficient housing stock and property tax laws. It just so happens that many businesses in California can currently meet those demands. A lot of places with bad government cannot, so just don't go there.
And if your local government seems to be turning sour, you need to stand up, make some noise, and let those responsible know that you will not allow your home to become one of those places. If things still go bad, leave. Corruption only works when people go along with it.
And that is why I moved from Chicago to Kenosha in 2002. As it happened, I then moved again to Madison in 2005, but that was moving to something rather than moving from something else.
What kind of city sells its own parking meters? The kind you don't move into.
- Wisconsin has higher income taxes than Illinois
- Kenosha and Madison have higher property tax rates than Chicago
The parking meters were sold 10 years ago under a different mayor, update your talking points. Meanwhile, Wisconsin is handing out $3 billion to a Chinese manufacturing company (http://money.cnn.com/2017/09/18/news/scott-walker-signs-foxc...). This is the same Wisconsin (and same governor) who cut school funding a few years earlier (http://www.politifact.com/wisconsin/statements/2014/sep/07/g...).
What kind of state cuts school funding and then gives billions to a Chinese company? The kind I don't move to.
His house has more than doubled in equity though, so not too bad from his perspective. I moved back to the midwest where shit is reasonable, now I just blow that 3400/mo on fun stuff instead of mortgage/rent.