Author Topic: Rent vs. Buy in Mountain View, CA  (Read 9389 times)

Atlas

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Rent vs. Buy in Mountain View, CA
« on: September 09, 2012, 11:51:52 AM »
Hello mustachians!

My wife and I will be moving to Mountain View, CA in the next month or so.  We are trying to figure out the best place to live, and I'd like to solicit advice from the community.  Both of our jobs are about 1mi from downtown Mountain View (Castro St).

The only reason we foresee leaving Mountain View would be to travel post-FI, which could be in 3-5 years, but we both truly enjoy the jobs we have, so we're not too hardcore about quitting.  Even if we were, we could see ourselves homesteading in Mountain View for a while anyway.  We've never lived in a home we own before, but we do have experience managing local rental properties.

Facts:
- Combined gross income of $230k/year, assuming 25% effective tax rate = $172k/year net
- Net worth of $370k
- Aiming for a budget of $40k/year, but wouldn't mind increasing to fit in a mortgage

Options I've considered:
- Rent an apartment: $1300-1600/mo for ~800 sq ft
- Buy a manufactured home:  $100,000 for ~1000 sq ft + unknown HOA-type dues
- Buy a condo:  $300,000 for ~800 sq ft
- Buy a retail single-family home:  $600,000 for ~1000 sq ft

Here are some supporting links:
Apartments
http://www.showmetherent.rentlinx.com/Listings.aspx?State=CA&City=Mountain%20View&MinBedrooms=1&MaxBedrooms=1

Manufactured homes:
http://www.zillow.com/homedetails/440-Moffett-Blvd-SPC-24-Mountain-View-CA-94043/59682874_zpid/
http://www.zillow.com/homedetails/440-Moffett-Blvd-SPC-93-Mountain-View-CA-94043/19513320_zpid/
http://www.zillow.com/homedetails/1075-Space-Park-Way-SPC-143-Mountain-View-CA-94043/19494411_zpid/

Single-family home:
http://www.zillow.com/homedetails/588-Farley-St-Mountain-View-CA-94043/2117376220_zpid/
http://www.zillow.com/homedetails/849-N-Rengstorff-Ave-Mountain-View-CA-94043/19512707_zpid/
http://www.zillow.com/homedetails/14-Moonbeam-Dr-Mountain-View-CA-94043/19513251_zpid/

More thoughts:
I am strongly leaning towards the manufactured home at this point because it seems like the most cost-effective.  I have some big questions tho:
1. Do manufactured homes maintain their resale value?
2. What are the typical HOA or rent payments for the land it sits on?
3. This clause from the park rules scares me, how often does it actually happen?  http://moffettmhp.com/rules_and_regulations
Quote
Management reserves the right to require removal of a home upon resale in order to upgrade the Park, in conformance with the California Civil Code.
4. My wife has some concerns about crime and safety while living in a "trailer park".  Does anyone have experience and feedback here?

Looking forward to hearing your thoughts, thanks!

Another Reader

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Re: Rent vs. Buy in Mountain View, CA
« Reply #1 on: September 09, 2012, 12:39:51 PM »
Have you ever been to Mountain View or the surrounding area?

Mountain View is a funny mix of neighborhoods.  Some are pretty bad.  I personally would not consider living in a mobile home in the parks you cite.  Please drive around them if you have not done so.

Good luck finding much for rent in that area in a decent neighborhood for under $2,000.  The rental website you mention has a lot of rents from two years ago.  Lots of those complexes are not in great areas.

Any condo listed under $400,000 is in an apartment building conversion from the 1960's or 1970's.

Space rents look to be in the mid $800's, based on the current for sale mobile home listings.  You will have to pay property taxes on the mobile home, unless it is old enough to be licensed by the DMV.

Zillow is useless.  The listings you cite are already pending.  For more current for sale and for rent information, go to www.mlslistings.com.  Put in Mountain View and see what comes up.  There were no active single family listings when I searched under $750,000.  Well, there's one that's being sold for land value....

You are going to have to up your housing budget or be prepared to commute a significant distance.  That's the price you pay to move to Silicon Valley.

Atlas

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Re: Rent vs. Buy in Mountain View, CA
« Reply #2 on: September 09, 2012, 05:18:04 PM »
Yes, I lived in Silicon Valley 2008-2010.

arebelspy

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Re: Rent vs. Buy in Mountain View, CA
« Reply #3 on: September 09, 2012, 08:23:41 PM »
Manufactured homes often don't keep their value and often do have high rent on the land.  Of course it will vary by location.

What's the rent on manufactured homes similar to what you're considering buying?
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Jarvis

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Re: Rent vs. Buy in Mountain View, CA
« Reply #4 on: September 09, 2012, 09:17:29 PM »
I'd strongly suggest renting.  Houses are way too expensive here in the bay area.

Another Reader

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Re: Rent vs. Buy in Mountain View, CA
« Reply #5 on: September 09, 2012, 09:44:25 PM »
With regard to manufactured homes, the structure itself depreciates.  The life is generally much shorter than a site built wood frame house.  Manufactured homes are considered personal property and there are valuation handbooks similar to the blue book for cars.  I believe one guide is published by NADA.  However, mobile homes in parks often have what is called "site value."  A mobile home situated in a low vacancy, high demand area with low space rent often sells for more than the value of the mobile home severed from the lot.  The difference between what the mobile home sells for installed in a park and the value of the severed mobile home is the site value.

Let us know what you find as you shop for housing.

$_gone_amok

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Re: Rent vs. Buy in Mountain View, CA
« Reply #6 on: September 10, 2012, 01:00:58 PM »
As someone who is also looking to buy in the same neighborhood, I think your options are overly optimistic.

It is possible to find an apartment that rents for $1600 but because Mountain View doesn't have rental control, your rent will increase quickly.

100K mobile parks are often older and not as livable or in poor locations.

Condos are getting multiple offers right now and there is currently no condo in the city of mountain view that is under 300K. The cheaper ones that are in short sales start around 330K. This condo (http://www.redfin.com/CA/Mountain-View/400-Ortega-Ave-94040/unit-208/home/2121053) on the market is the best one I found with close approximation to Casto street, a similar unit in the complex sold for ~380K a month ago.

It will be hard to find a 600K single family home in MV. Almost every single family home on the market right now in MV is above 700K. Housing price has increased drastically in the last 2 months due to low inventory. I'd suggest you check MLS instead of Zillow to get a sense of the market right now. Housing price data 60 days ago are no longer applicable.

The mobile home parks in Sunnyvale and Mountain View have higher crime rates but it is not something that I'm too worried about if you don't have children.  There is an interactive crime map that shows you the location and type of crime that happens in a city, google for it.

If you are willing to commute, I think Sunnyvale, Santa Clara, Menlo Park or even North San Jose are good alternatives. 

 

Wow, a phone plan for fifteen bucks!