Sub $1M house in Irvine area

[David Cohen]

We are currently renting a house in Irvine and working on our next move

Option #1 - buy a house in the area for our family to move in, looking for at least 2k SF, 3+br, sub $1M

Option #2 - buy a house / apartment(s) and rent it/them and stay on rental.

Can you share your opinion? Any high rental ROI in orange county area (2h drive radius of Irvine)?

Thank you!

Dave.

[Joe Homs]

@David Cohen  my vote is Option #1 and here is why...

If you are looking for a sub $1M home in Irvine then you have a high net worth.  You are probably paying over 30% in income taxes to uncle Sam and another 11% to Uncle Newsom (please check with your CPA.)  You are in need of a tax write off.  This would be your principal residence and if appreciation goes well then you can sell in two years and NOT have to pay Uncle Sam anything in capital gains (up to $250K for you and another $250K if you are married.)  This option provides you with tax write offs and possible appreciation.  (Yes, the new tax law limits you on how much you can deduct, so please check with your CPA.)

Option #2 you are an investor.  Its difficult to impossible to find something here in California that will cash flow for you.  Which means that you will need to pull out money from you pocket every month to pay for the negative cash flow.  Tenants do not treat the rental as their own and there is much ware and tear that you will need to deal with.  Property managers, contractors, repairs, all could add up very quickly if you don't know what you are doing.

Good investing...