I’m convinced now is the right time to buy San Francisco real estate – Business Insider

  • In 2017, I sold the San Francisco rental property I’d owned for years for $2.75 million. Investing the proceeds provided enough passive income to allow me to be a stay-at-home dad.
  • Now, just a few years later, I’m again feeling bullish on real estate. I think now is the time to buy something else.
  • Prices have softened all across the US, mortgage rates have collapsed, and the stock market is back to an all-time high. Plus, rents continue to tick up, wage growth is reaching new highs, and the next recession won’t be as severe as the last one.
  • However, I’d love for those of you who are bearish to blow my arguments to smithereens.
  • Read more personal finance coverage.

Back in 2017, I had a very difficult decision to make. My rowdy tenants gave notice and I had to decide whether to sell my rental property or try and find new tenants.

The house had been rented between 2014 – 2017 for $8,200 – $8,800 a month. But when I went to find new tenants at a similar rent in 2017, none were to be found. Instead, I got a couple of offers for only $7,500 a month after 45 days of looking.

Because my tenant situation gave me stress and my son was just born, I really felt that 2017 was a good time to sell. Further, I was running up against the $500,000 tax-free profit exclusion limit.

Earlier, in 2012, I had tried to sell the house for $1.7 million and received zero offers. My agent at the time told me one couple was looking to lowball me at $1.5 million and I told them don’t bother. Fast forward five years, I was able to find my one and only offer for $2.75 million so I took it.

After paying fees, taxes, and the $815,000 mortgage, I was left with about $1,800,000 in proceeds. Over the next 60 days, I invested $600,000 into dividend-paying stocks, $600,000 into California municipal bonds, $550,000 into real estate crowdfunding, and left ~$50,000 in cash.

So far, the reinvested proceeds have done well. But most of all, the reinvested proceeds have provided a greater amount of passive income with minimal work on my part. I’m extremely thankful I was able to free up time since mid-2017 to be a stay at home dad.

I’m also thankful to the Financial Samurai community for sharing their thoughts about whether or not to sell back in 2017. After over 1,000 votes, 75% of you said sell, which gave me added confidence to let my once beloved property go.

In this post, I will argue that a golden opportunity to buy real estate is once again upon us. My spidey senses are telling me it’s time to buy at least one property before January 1, 2021.

After I finish telling you why I’m getting bullish on real estate, I’d love for those of you who are bearish to blow my arguments to smithereens.

Why It’s time to buy property again:

Article source: https://www.businessinsider.com/now-is-the-time-to-buy-san-francisco-real-estate-2019-10

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