Had posted the below in another category copying it here to get more local folks:
I have a property in 92127 area (Del Sur) which is my current residence and its has Mello Roos (MR)and high HOA even though its a new [email protected] I was wondering whether it is a good idea to rent my current one out and buy another one near 92130/31/29(Scripps Ranch/Carmel Valley/RP) where there is no Mello Roos and low HOA. Reason being i can put 20% down and get current lower interest rate for the new one under 4% and not pay Mello Roos and low HOA. The only issue would be that to buy 2000sq feet house in scripps ranch would be around $1million and i have to put 20% down and hope i can rent out my current property that would cover the current mortgage and MR+HOA which i think it would as the location i am in is really good.
Let me provide a synopsis of my current standing. I bought a small condo in Mira Mesa @2009 and stayed there for 2013 and rented it out after moving to my current property at Del Sur @2013. So i have good equity on both properties. Now interest rates dropping back to below 4% has made me wondering whether i should buy another one in probably 92130/31 zip code since due to good schools(as i have a 5 year and 3 year old ) and to be near to work for both wifey and me(work in Mira Mesa) and both zip codes have no MelloRoos as such.
I was wondering whether it will be a smart move to buy another one in 92130/31 zip code under 1 million (as i it needs to be atleast 2000 sqft and SFR) and get a low interest rate and rent out the Del Sur property.
The only thing that bothers me is if i buy something around 1million and putting 20% down payment even though i can afford the loan and have a job security for atleast 5 years( cross my fingers and can't predict job security beyond 5 years), i am hesitant to get into bigger mortgage as i want to retire early let say in another 10 years and a bigger mortgage(around 800K) may turn out to be a bad decision.
Expenses related to a rental are more than mortgage, Mello Roos, and HOA. Some other items are vacancy, maintenance, and cap ex.
Long term your home in Del Sur and your new purchase are likely to appreciate (historically have appreciated). If your timespan is 10 years I am confident both will have appreciated. They are nice areas and should get nice, low maintenance tenants.
My primary concern is whether this is the best investment you can make. We own quite a few units. You know which is our worst performing for its equity position? It is our ex-home. It was purchased primarily to be a nice home and not necessarily an outstanding rental property. Therefore it should not be surprising that it is our worst performing property.
I suspect you will do fine with your investment plan but I suspect you could do better.
Don’t forget. If you have a gain, it’s tax free if you sell it as your primary instead of as a rental.