New home in Great Park vs old home (after 2000)

[kevin198897]

Hi,

My budget is around 700k, and am looking for 3b3b condos or townhouse in Irvine. I've been debating on whether to purchase new homes in Great Park vs old homes built after 2000. I'm treating this as an investment and am planning on selling it in 5 - 10 years. I will live there and rent out the other rooms to help with mortgage.

Great Park for new homes seems to be a good option. Great Park area (Parasol Park and Beacon Park) is under active development and building new amenities and has good schools. So the new homes there seem to have a very good potential for value increase. However, the downside of it would be more expensive, more up front cost, higher tax rate and mellaroos, and more difficult to rent out the rooms since it's far from UCI.

For old homes built after 2000, some potential areas would be Quail Hills, Woodbury, Cypress Village and etc. There's not that many inventory, but it does pop up from time to time. Good thing about old homes is that it's slightly less expensive, less taxes & mellaroos, no need to upgrades, and easier to rent out the rooms. Downside would be the that the home price won't increase as fast as new homes since the neighborhood and location has been developed and established.

From investment perspective, which option is better? Based on my calculation, the number 1 factor for the final revenue seems to be home price value increase, not rent. But I'm told that the cost of the investment is much less with old homes.

Any advice would be highly appreciated. Thank you.

 

[Burn That Belly]

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[Burn That Belly]

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[kevin198897]

Thanks for the response. My desired budget is $700k, but I might be ok with $740 if the place has better potential.

With the new tax reform, looks like the future direction is to reduce tax deduction, meaning people will not be able to afford homes that cost over $700k, and there will be more people renting. Maybe it'd be better and safer to get an old home built after 2000 near 405 or 5 and rent out the rooms and rely to equity built up over time?

With new homes, I will be heavily reliant on the appreciation, with the tax reform, sounds like it will hurt appreciation rate since there will be less demands due to less tax deduction.

 

[jmoney74]

Thanks for the response. My desired budget is $700k, but I might be ok with $740 if the place has better potential.

With the new tax reform, looks like the future direction is to reduce tax deduction, meaning people will not be able to afford homes that cost over $700k, and there will be more people renting. Maybe it'd be better and safer to get an old home built after 2000 near 405 or 5 and rent out the rooms and rely to equity built up over time?

With new homes, I will be heavily reliant on the appreciation, with the tax reform, sounds like it will hurt appreciation rate since there will be less demands due to less tax deduction.

If you're putting 20 percent down then you won't pay much more. Not sure if you write off up to 500k. Don't think it just cuts off at that point. Think you can write off up to that amount but u can check.