Joel
Well, I'm certainly no expert, but I'll chime in with my thoughts.
I, like you, spent time in public accounting (KPMG). I agree with your analysis that there is a good chance you'll move when you make the transition into industry. Even if the new job is still in Sacramento, you may want to move closer to work to cut the commute, bike to work, etc. You can't count on being in the house for 5+ years. So you're correct in looking at this from a purely investor/landlord perspective, not a homeowner's perspective.
OK. So you're looking at a potential rent house now. Do your research, but I agree on the 1% rule of thumb. Use that as your litmus test. My rentals were all purchased as distressed properties, and came in around $90K (including cost of improvements, but not the cost of my sweat equity) for $1,400-$1,500 in rent. If you're buying a move-in ready house, keep the number close to 1% or it will be cash flow negative long term.
Keep in mind this is a rental. Not something an up and coming professional might buy as a long term house. My point? Buy in a working class neighborhood, not a yuppie neighborhood. $200K may be working class in Sacramento, I don't know, but you see my point.
Yeah yeah, you can bet on the appreciation, get super low interest rates right now, blah blah blah, but cash flow is king in my book. I want my properties to put money in my pocket every month. I don't plan on selling them for a long time (if ever), so I don't care about the value. That may mean you NEVER buy a property in Cali, even though the market is red hot. So be it.
- Agree with the above posts on estimating rents in an area. Go look at some properties if/when you get serious. I did this and actually found my houses would rent for a bit more, so I adjusted accordingly
- I'd shy away from being an absentee landlord. Especially starting out. Until your job situation firms up, I'd hold off
- when I was younger I read a bunch of RE books, stuck money in index funds (including a Vanguard REIT), and when the timing was right and I was 'settled' I made my play. Nothing wrong with that approach
EDIT: A couple more thoughts...
If you COULD find a home (not condo) in a working class neighborhood close to the 1% rule, say an older $125K house that would rent for $1,000-$1,100 (most any SFR will rent for $1,000) I would seriously consider buying one house per year for the next four years as an owner occupant. Stay the required 12 months and repeat. Learn rehab skills. Live cheap. Hudhomestore.com would be a good site to visit.
- 9913 Nebula Way is something like I'm talking about
http://www.hudhomestore.com/Listing/PropertyDetails.aspx?caseNumber=043-756232&sLanguage=ENGLISH&zipCode=&city=Sacramento&county=&sState=CA&fromPrice=0&toPrice=0&fCaseNumber=&bed=0&bath=0&street=&buyerType=0&specialProgram=&Status=0&OrderbyName=SCASENUMBER&OrderbyValue=ASC&sPageSize=10&pageId=1You still might be an absentee landlord one day, but you'd have four properties in Sacramento, not just one. And, chances are, your next gig will be somewhere semi-close by. Having one house off somewhere is a pain, having four+ is a business you turn over to a property manager and visit once a year.