Bay Area: Buy and live OR Rent + Buy Out Of State
Hi everyone, looking for some thoughts from members of biggerpockets.
Our situation is:
We are a married couple, live in the Bay Area for last 4 years (moved to US from Ukraine), have no kids, work in tech, getting tired of renting (losing money) and thinking on what we should do next. We have around 60k saved (I know that's not impressing at all, but that’s where we are) that we could spend on down payment (we also have 401k accounts that we could borrow from, but it still wouldn't be enough to get even to 10% down payment here in the bay). In the next 3 to 5 years we don't plan to have kids, and focusing actively on growing our careers.
So far, we are thinking mostly on these options:
1 - Use first time homebuyer program and buy our first property here in the bay, with 3-5% down payment. Since commute is a big thing for us, we would be looking into areas like Sunnyvale, Santa Clara, Redwood City since all major top tech employees are here. And we are talking about 2b-2b apartments or townhouses in price range 750-800k. East Bay is out of scope since it will "eat" too much time for commute. As a plus I see appreciation of properties in this market.
Here we are talking about $5.5k a month (Based on Redfin: Principal and Interest $3,619 + Property Taxes $812 + HOA Dues $495 + Homeowners' Insurance $146 + Mortgage Insurance $474)
What I dislike about it: HOA fees that are getting from 300 up to 500$ a month; In case in a few years getting job in the city (SF) the commute will be terrible so I will have to rent out this place and rent something closer to my job in the city.
2 - Buy some property out of state with 20% down (up to 300k house with 60k down) and try to cashflow from it. Keep renting places around the bay, saving more money to keep buying out of state.
Here we still expect to rent a place in the bay ~$2.5-3k and potentially getting $100-300 from a rental property out of state, potentially save $2-2.5k month to buy more properties in future.
What I dislike about it: Out of state properties do not appreciate as much as Bay Area market does. We don't have any experience of doing this, will have to educate ourselves, but ok to making mistakes since this can be replicated to future investment properties doesn't sound like a big issue.
3 - Keep renting and saving money. Buy locally when will have enough saved for 20% down payment.
Here same as above rent a place in the bay ~$2.5-3k + potentially save $2-2.5k month
What I dislike about it: Feeling FOMO, don't know do I need to worry about rates going up or about losing every month money on rent…
Any input will be valuable!
Thanks to everyone in advance!