Thread regarding Qualcomm Inc. layoffs

@ 132487: It helps if you know what you are getting into ahead of time, and realize that there's not too much that renters can do to a property that can't be fixed. Plus I will track them down and sue their a$$es for damages that exceed the deposit. 8 )

Just DON't DO IT!! Your imaginary favorite retirement spot WILL NOT be what you want from life in 10-20 years from now. I guarantee it. If you're not physically there to take care of that "dream" property, your hired property management (company) will make sure to take you to the cleaners. Look into REITs instead, if you absolutely have to have RE exposure with no hope of any real inflation adjusted returns.

If you can't afford to buy a house in San Diego or Silicon Valley, or if you think your location may change, consider buying a small investment property in a place you might like to retire, where property values are not yet sky high, and rent it out. That way you have the tax advantages of property ownership, and an investment that is a hedge against the instability of the stock/bond markets.

You buy in to a condo/town home/house lifestyle because it's cheaper in the long run than renting equivalent living quarters. Except for very rare cases, the landlord is making a profit off of the renter, every month. For most homeowners, the first 15 years is no better than renting because the mortgage industry takes the place of the landlord. At some point in the process, you'll get rid of the HOA because they too make money off of you. In the end, you will own your dwelling and the land beneath it, if you're one of the lucky ones.

First and foremost, it is not advised to buy a house you cannot afford to pay when you receive GTFO package.

If I was to rent, I'd rent in Sorrento Valley. It's the perfect location for San Diego that's in a decent neighborhood accessible to everything with minimal commute. Rent is pretty high there but you get what you pay for.

Anonymous132091, if you bought in 2006, you bought at peak prices. Ouch. That was a terrible time to buy. If you bought in 2008, chances are you are doing great even if you get laidoff. You'll be able to rent it out with a hefty positive cash flow, or you can sell with a hefty capital gains that is going to be tax free up to $250k($500k joint)

I have read on zillow calculators and other real estate calc for zip codes 92121 and 92122 - if you plan to live more than 8yrs (ie 9yrs and onwards) then it makes sense to own rather than rent. otherwise its not wise financially.

so if you bought it 2006, you are ok. if not and you get booted, you;re abt to have one grand party of your lifetime...!! enjoy!!

Anonymous131921, sure. But there's a lot of other things you could do. You put all of that money you would have been saving into the stock market only to loose it much faster than a slow, long drawn out decline in house prices...If you're financially irresponsible, you could be tempted to spend more of it on big LCD tvs, new cars, eatting out everyday, etc. Afterall, the majority of people in this country have absolutely no financial self-discipline and the moment they do have slightly more money, they have a tendency to just spend it on crap. Sometimes, forcing oneself to have a financial commitment isn't a bad thing, especially for the ones that lack financial discipline to save/invest. People like to talk a lot of about financial opportunity cost of not owning. Well, usually, those people lack the financial discipline/knowhow to save/invest. Because if you really stop and look at all the rules/tax laws/etc surrounding real estate versus all the other forms of investments, you'll understand all the tax laws and rules heavily favor real estate over any other investments. Think about it. What other form of investment does the IRS allow you to easily write off the interest and what other form of investment allows you to pay no capital gains taxes for up to $250k/$500k. What other form of investment gives you great leeway in what you can deduct as "investment expense" like a rental property can. And what other form of investment could you run as a LLC/partnership to get even more tax benefits without the IRS raising that much of an eyebrow? That said, there are definitely times one shouldn't buy real estate and opportunities when one should. I'd say that that right now, Q engineers should probably wait to see what happens, especially if the Q engineer doesn't have a lot of money off to the side.

Anonymous131936, Last time I checked Arizona was a desert. So a prolong drought will simply create a demand for companies to solve the drought problem....

Companies will make money by building desalination plants, running water pipelines intrastate, etc.....When there's a need, some company will profit from it....

Forget the earthquake risks, what about the drought? People are just going to start walking away en masse unless the weather changes soon.

imho,One big negative of owning house is attachment to house itself--do not underestimate the opportunity cost of committing.

I meant "As far as insurance costs, if you buy at the right time, again your PITI (principal, interest, tax, insurance) costs would be on parity with your monthly RENT costs"

Anonymous131908, I would agree with you if you are just starting out with little or nothing in terms of savings and have to overstretch to buy anything remotely interesting and don't have the benefit of having a Bank of Mom and Dad who is willing to loan you money with an indefinite lending terms, especially right now when home prices in the better parts of town are well above peak prices reached in 2006, because it doesn't make sense for you to overstretch just to own for the sake of owning. Aside from that, fire and earthquake and water shortage risks are the least of your concerns, and are not serious issues to be considering. If you are really that paranoid about those 3 factors, you shouldn't be in California at all (either as a renter or landowner), period....As far as insurance costs, if you buy at the right time, again your PITI (principal, interest, tax, insurance) costs would be on parity with your monthly mortgage costs, since especially in CA, rent prices are rising at a much faster rate. And as far as liability insurance, even if you rent, you should be buying renter's insurance to cover you for any sort of liability you may incur (whether it's damage to property you did as a renter), or if you get sued (like you have a pitbull and it bites some visitor, despite your landlord's contract saying no pets, in which case your landlord sues you and washes his hands clean from the liability since you broke the no pets rental agreement and/or the bite victim ends up suing you for your dog bite). I always make my tenants show proof of renters insurance before I let them move in.

I think renting in San Diego and the Bay Area makes a lot of sense. Owning a property just cost too much aside from the risk of fires and earthquakes which also carries it's own insurance premiums which you have to pay on top of property insurance and on top of extra insurance in case somebody falls in front of your house and sues you. Then you have the high water rates coming then you have maintenance. It makes a lot of sense if you think about it.

...that said...If you still rent and are a Q employee, I probably wouldn't be buying right now, since home prices are high, and the risk of you relocating is high....But if you currently own.....

Nothing wrong with renting if you plan on moving around and/or you don't want to deal be being a landlord. But that said, financially, renting for an extended period of time can be detrimental, for many reasons.....For the past few years, home prices had bottomed and interest rates were at a historic low. In many nice places, your monthly PITI( principal+interest+tax+ insurance was the same amount as your rent prices (or close to it), with standard 20% down. So your monthly payments of rent versus mortgage was the same, before any tax benefit....You can deduct the interest part of your mortgage payments and deduct the property taxes on an itemized deduction(as long as your don't get hit with AMT), which ends up lowering your income taxes and makes your monthly housing costs lower than renting. (especially since engineer's salary pushes you into the upper middle class income brackets without any sort of deduction)... Your 20% down isn't really losing any money since savings interest rate/CD rate is a pathetic 1%. And if you did buy when home prices were beaten after the RE crash, you have a sizeable appreciation... After living there for 2 years, and if you decide to sell your home, up to $250k in capital gains is completely tax free ($500k for joint filers). You won't find another investment that has no capital gains taxes. Stock investments/dividend investments you still end up paying 15% in capital gains taxes. And on top of that if your AGI exceeds $200k/year ($250k/year for joint), you pay additional taxes for being considered "wealthy" by both the federal (medicare tax surcharge, and other new tax rules ) and CA state (prop 31). The $200k ($500k joint) capital gains exclusion from sales of your primary home does NOT count toward such tax surcharge. And you can take advantage of this $250k/500k capital gains tax exclusion every 2 years. Lastly, especially in Bay Area and in SoCal, you aren't dealing with a landlord that jacks up your rent costs every so often, because they can....I think rent prices have increased about 10-15% within the past 2 years, for example. Eventually (after 15 years), your housing cost are neglible assuming you pay off your mortgage. And thanks to Prop 13 in CA, your property taxes can't rise too much per year, and when your kids inherit your property, Prop 13 also protects them from getting reassessed at a much higher tax rates too. Thats why, when I inherit properties from my parents, I'll be paying $1000/year in property taxes for every property that is now in the 7 digit figures. (Assuming prop 13 isn't repealed, which probably won't happen for awhile). There are many other economic reasons to own related to building wealth, estate planning and estate taxes, and lowering your effective tax rate, but that requires you to run your real estate purchases like either a partnership or an LLC and beyond the scope of most people's understanding who are on a W2.