Bay area(east bay) or Texas (HOU /DFW)

[Ron Singh]

Is it still good time to buy in sf bay area or Texas for rental /investment purpose : SfR/multi fm

Pro and cons for me :

Bay area appreciation to continue ? hard to get cashflow - can manage locally

TX - cashflow but would need prop management company involved, so cut in cashflow

What would you do , for long term investment at this time ?

[Arlen Chou]

@Ron Singh the BA is a different animal than most places. The BA proper is geographically constrained with very few transit arteries in and out. Additionally, you have VERY bad zoning laws that keep new housing capped. It may look like there is a ton of new products coming online that will flood the market. The reality is that they cannot build enough fast enough. Trying to get permitting for higher density housing is a very long and costly process. I could write a dissertation on why to buy and hold in the BA is a strong play, but if you do a little research there are graphs floating around here on BP that go back approx. 30 years showing the effects of the various downturns in the market. 

Please keep in mind that the BA is very different than "California", so don't take general CA data and apply it to this local economy. 

As a real life long term example, my first property was purchased in 1997 in Mountain View. It was a 2 bed 2.5 townhouse. The purchase price was less than $300k currently Zillow has it estimated at $1.3M. Unfortunately, I sold it back in 2004 for over $600k. I was young and ignorant back then, I don't sell anything that I buy now. I just refi cash out every few years.