New to San Diego, should I buy or rent?

[Ali K.]

Hello BP,

My family is moving to San Diego temporarily (say one year) with a prospect for us to permanently reside in Southern California. I have a descent cash-flowing rental portfolio in Minneapolis that I self manage, along with my primary and a full time but flexible job that allows me to travel back and forth. We need a place to live in San Diego and my question is:

Should I sell (one or two) rental property in Minneapolis and use the equity to buy a primary in San Diego or should I just rent in San Diego? Some +/- arguments:

+ diversification over cash flowing and appreciating assets

+ building sweat equity in my next primary in San Diego

+ tax advantages on a larger primary

+ taking advantage of the cool market, that’s selling low and buying low (please comment on this)

+ having fewer properties to manage (yeah managing duplexes is not my favorite)

- high interest rates

- high price to rent ratio in San Diego

- giving up cash flowing assets

- unnecessary transactions costs

Other arguments are welcome.

Neighborhood suggestions are welcome for descent but not super expensive houses (say A- quality) with good access to downtown.

Thanks for your comments!