Wait now to invest in Austin or Raleigh

[Jay Wang]

Hi,

I am a single engineer in my early 30s. I was able to save 200K but the maximum home I can purchase in bay area, California is 1.4 million. I cannot afford any single family home in mountain view, and I don't like to live more than a half hour drive away from my house. I am happy renting an apartment for $3000 now, with around 10 minutes bike ride to work.

My question is: would you recommend me to:

1. buy a single family home in South San Jose, drive an hour to work every day. I will hate my life but the home appreciation is fast.

2. Invest in multiple houses in Raleigh, Austin?

I have a colleague who bought 3 new homes in Austin near the Tesla factor in Mar 2020. And her investment properties already appreciated 100K each house. I am thinking of buying homes as well, but not sure if the market is too high now.

Any advice will be appreciated! 

[Pat Lulewicz]

@Jay Wang I can only speak for the Raleigh market, but we've had a 15% appreciation Y-o-Y and I work with homeowners in the $600K-$1M price point who haven't slowed down their offering. There isn't a lot of land within the city limits and so appreciation is extremely prevalent. We are getting an Apple HQ over the next few years so you'll see continued job and wage growth.

I also work with a handful of out-state-investors in both the Raleigh/Durham and Greensboro markets on purchasing rental properties with great success to take advantage of the aforementioned appreciation, great ROI on rental rates, and continued rent growth with the limited housing inventory and incredible demand.

You can't go wrong buying in this market especially with the amount of capital you have and what I can only assume to be a strong DTI based on your original post.