Keep a eye out for something that already has, or that you can easily modify, to create a second…
By: Christopher S Miller
Tags: Housing Crisis, California, Fire, Money, Moving

Keep a eye out for something that already has, or that you can easily modify, to create a second, rent-able space. Generate a few extra $100’s per month renting out a room.

Bummer to have a stranger in “your space”. But with a separate entrance and their own bathroom, and maybe kitchenette, … it could be tolerable for you.

As you’re over 62, also consider a Reverse Mortgage. Buy a house for a low down in an appreciating market. As the house inflates in price, that appreciation counts as your equity. When that “paper equity” + your down payment nest egg gets to equal 50%-60% of your outstanding mortgage balance, you qualify for a Reverse Mortgage. After securing that, you get to live in your house, mortgage payment free for the rest of your lives. And, you can later do a “refinance”, if in a few years that house has continued to appreciate in price. This will allow you to cash out that increased value, … without having to pay back those funds, or pay taxes on them. Check this out with an ASTUTE financial-tax advisor!

BUT, this real estate boom is headed for a bust. Might be best to rent for awhile longer. Check out different areas of the country before you buy-in.

Residential real estate prices can only rise as long as there are enough renters capable of paying high enough rents to cover the speculator’s debt service and taxes on that house.

Every time that house gets flipped, at a higher price to the next buyer, … that new speculator has to raise the rent to cover their higher mortgage payments and stepped up property taxes.

(Yeah, pity the poooorrr speculator!)

Here in Las Vegas, my 30 year old small house has gone up in market price 270% in these last 10-years. Obviously, working class wages have NOT !

The renters around me are doubling and tripling up in order to combine enough crappy incomes to float the $1,500 — $1,700 monthly rentals !

Failing that, the landlords are running their un-rent-able houses as multi-unit Airbnb’s. Illegal, but they need that $2,000 — $2,500 income to float their mortgage and property tax costs!

Contrary to what one would think, people with money are more commonly driven by desperation and delusion to make MORE money, than by common sense and a recognition that all “free money” making rackets eventually hit their limits.

As you’re from the Bay Area, moving into the desert SW is a non-starter! We’re already into water rationing and extended periods of summer heat above the 110º’s. This would be lethal in your home, should the power grid fail.

Prevailing winds are out of the west. So you’re gonna be exposed to forest fire smoke fumigation anywhere west of the Pacific coast. And that entire PNW maritime forest ecosystem is a goner! It’ll burn, and re-burn, until its converted to chaparral and steppe.

Earthquake and coastal retreat, tsunami, land slides, and earth slumping are are significant hazard issues for any coastal area property in No. Calif up through Washington.

Getting and MAINTAINING, AFFORDABLE, flood and fire insurance may also be a problem. AND, you MUST maintain such a condition of your home mortgage. If you let your coverage lapse, your lender will foreclose on you. And if your insurance carrier “red-lines” your area a couple years after you move in, raising your homeowner’s premium to $2,000 or more per year, … you still gonna be able to pay the higher premium; plus your mortgage, plus your property taxes, plus your structural maintenance ??

Don’t buy anything even near a flood plain zone. And a lot of desert areas have built subdivisions in arroyo areas that may or may not be mapped as flood prone!

Tough to find a secure and affordable, and attractive place to live !

Choose wisely.