I think that post pandemic, the Bay Area’s density might be a liability for future housing price appreciation and overall quality of life. What do you all think of Scottsdale, AZ in that regard? Sure, the summer temperatures are hot, but $600k can buy you a 2200+ sq ft house in a gated community with low monthly HOA dues and within walking distance to a prestigious golf course.
You can buy a similar or larger house in Sacramento or anywhere in inland CAfor less. No need to go to Arizona. It is unlivable 4 months a year. I know plenty of retired people with Arizona houses. During June through September they go somewhere else. Great place to live if you can afford to travel. Those 4 months are ideal almost anywhere else in the northern hemisphere.
My friends in Tahoe spend 3 months skiing and their summers here on the lake. The rest of their time in their house in Scottsdale.
Average temperatures … even though lows are hot… Especially for people in the BA that aren’t used to sleeping with AC.
Well summarized idea. This epidemic has revealed the hazard of high density housing. Top it off with California reaching its max population. I have a feeling home prices in outlying areas will appreciate better than those in the urban core. But, by how much ?
How do you compare Modesto-Salida-Riverbank area with Sacramento? The eastern parts of the Sacramento, like Folsom or Auburn or Roseville look very fresh whenever I pass through those areas.
I am big on Folsom. They are building 15,000 homes there. It is newer, has tech, ethnic diversity. My farm is 20 min from Costco.
Modesto can’t compete with the Sacramento MSA of 2.5m. I know Stockton well. Flipped 6 houses there. Own a house in Discovery Bay. I love the delta. But Sacramento is a much better investment. The State government is a cash cow.
About 15 years ago, I looked for homes in Elk Grove and Mather Ranch. Then A few in Rancho Cordova and Folsom. But, somehow did not pull trigger. I am sure those homes would have appreciated a lot by this time. I know at least three people who have relocated to Sacramento MSA.
Back those days, Realtors were pushing Natomas a lot. It was not yet incorporated. I did not understand what was so special about it.
Eldorado Hills is the place to buy. But my place is 15 min away in the country. Five acres 5500sf for less than a track house on a tiny lot in Folsom. You pay a lot to be close to a Starbucks. Although we have one 10 min away in Cameron Park.
In mid 1990s’ I attend an interview at El Dorado Hills. Love that place. Used to be empty those days. I hope it is still the same way. Not been to that area for quite some time.
It’s changed a lot. I used to go deer hunting there in the 70s and 80s. It is very nice. Great shopping center. Nice restaurants. Plenty of new homes. Plus large older homes on big lots. They are building homes all the way from Folsom to Cameron Park.
Everything is dependent upon demand and supply for homes in the location. Scottsdale is generally considered the better part of Phoenix Metro. So, Rental should not be a problem. Make sure you run a good estimate of elements of operating expenses (like repairs and maint, vacancy factor, property tax, insurance, and management fee, etc). That is the key for picking a good rental. Then see what will be your net operating income after paying for these expenditures from the rent it will generate. Then subtract your financing cost (P+I). The remainder will be yours to keep.
Added later: Some people say one should assume that half of the rent will go towards operating expenses. So, the other half of the rent should pay your mortgage (P+I) and to you. But, if you are buying old home or in a neighborhood where homes do not rent fast, you can assume 60% or higher of your rent towards operating expense. Best to talk to someone familiar with the characteristics of homes where you want to buy for rental.
Added more: Buy a home that is sized for the neighborhood. Buying a bigger than the average of the street will not get you more rent but increase expenses or leave possibility of an unauthorized occupant, if you worry about your tenant subletting a room in the rental.
I’ve noticed that houses in the 3000+ square foot size in Scottsdale have two A/C units, which costs a lot more in electricity costs to cool, and would be a waste if there are unused rooms. I also think in a warm climate, a house with north/south exposure vs east/west exposure is especially important for comfort and keeping cooling costs low.
If I am living in Arizona, I will not start cooling until it is 85F outside. I do not feel hot until it is 80. I can live upto 85. But that is me. I enjoy a little warm weather. Good thing about Arizona is that it is dry, so no humidity to deal with. That alone is a very nice thing to have. Also, 3000 sq is too much space rental purpose. But, check with a local realtor and property manager (or even browse craigslist) for the kind of home that are available for rent. . Unless it is for short term rental and you want 12 guest in a house I would keep it a smaller, around 2000 sq feet. In many places, if you have bigger home, I have seen two families start renting them if it is in a less affluent area. Buying for short term rental might not be a bad deal if want to buy big and want to use it for yourself sometime later.