Things You Should Know Before Moving to Silicon Valley

Housing

  • If your work is near a Caltrain station, consider moving to a town near another station (Mountain View, Redwood City, Sunnyvale, ect.). You’ll be able to bike to the station and then bike to work, if that is something you’re interested in. It may make it more complicated since you would be expanding your search, but you shouldn’t feel limited to Menlo Park if taking Caltrain is a feasible option. You might also consider living closer to the Caltrain in Mountain View or Sunnyvale where’s its cheaper. Take the train in with your bike and ride from the closest stop.
  • Padmapper.com is the best tool for apartment hunting.
  • The company you are going to work for should have some internal postings for roommates or housing if you can’t find anything on your own. If its Facebook your working for they should definitely have something like this.
  • Menlo Park is one of the most expensive areas south of San Francisco, so you won’t find anything decent for less than ~$1700/mo unless you get some roommates.
  • Avoid living north of Menlo Park only because that would double your monthly train ticket cost (the prices are zone-based instead of distance-based, and Menlo Park-Sunnyvale are all in the same zone). Then again, maybe your company offers compensation for commute costs.
  • Menlo Park is a small city in one of the most affluent places in the country – finding affordable, available housing within a small radius of your office will be a challenge. Your best bet would be to live somewhere along the Caltrain line from Downtown San Jose to Downtown San Francisco, with prices generally falling as you go south toward San Jose.
  • Mountain View is a pretty good place to start out in and places do 6 month leases. It isn’t too far from Menlo Park and the rain isn’t bad. Be careful of where in Menlo Park you look to live. Some areas are super nice and some ares are not so much. Also try to avoid East Palo Alto.
  • You should give yourself as much time as possible to find a place because it’s not easy.
  • Rent is what is going to cost you a lot. The insane rent prices will not only make your housing insanely expensive, but also unstable.  One of the reasons is driven by a lack of inventory/availability relative to the people that choose to live here.  Expect a large rent increase after a year ($200-$300/year) of an already expensive lease because they know how hard it is to move and find another acceptable place. A studio might seem like a good way to control costs, but they often have single-occupancy requirements.  You can alleviate rents somewhat by living far away or in a bad neighborhood, but traffic is very bad here and getting worse. It’s which evil (if either) you’re willing to put up with: spend too much money on rent or too much time on commuting. 115k is ~80k after taxes and benefits then subtract 30k for rent, 15k for monthly expenses and you get around 35k to actually live on. Combine that with high gas prices, food prices and just an overall high cost of living it’s an ok salary.
  • Just don’t get a $4000/mo apartment and lease a tesla, or get xfinity triple play or other unnecessary stuff. You’ll be fine. San Jose is a great place.
  • Expect to pay $2000 – $3000 per month for a 2-bedroom apartment. If you get a job near Menlo Park or Palo Alto, you could live in Hayward, Union City, Fremont and drive. The rent is much cheaper (e.g. a 5-bedroom house for $2500 per month) and the commute over the Dumbarton bridge isn’t bad, though you’ll be paying $100 per month in tolls and gas in California is pretty expensive. There are a number of places that you can live where not owning a car at all is totally doable. Get a clipper card and a fastrak (if you have a car) regardless of where you live or work. Assuming you’re working in tech with a good salary, expect that about 35-40% of your gross income will go to taxes, between state and federal. You will probably also end up needing to itemize deductions on your taxes just based on state income tax.
  • It’s possible people don’t buy houses, they buy townhomes or condos. Not as nice, but maybe big enough and you can start building some equity while you save cash, then another 5 years later, you’ll have enough between cash and equity to make a down payment on a house. If you have $100,000 in savings, you already have just about enough for a 20% down payment on a $500,000 townhouse in Fremont or Milpitas. Another approach is to just work hard for 2 or 3 years to save every penny you can. Move to a cheaper place, trade your nice car in for a used Toyota, bike to work to save on gas, eat at home instead of going to restaurants. Also, if you’re renting in a more expensive area, and want to stay there, look for a higher paying job. There are tech jobs that pay more than $130,000. It sounds like a lot, and it is, but when the cost of living is this high, it makes sense. It’ll probably be less interesting than a startup, but you can’t have everything.
  • Is it advisable, in the current housing market, for a single, childless person with a salary in $130,000 to buy a townhouse or condo? Is it a dangerous idea in a volatile industry and a volatile housing market in an expensive area? Should you just keep renting indefinitely?
  • You should be wary of buying anywhere between San Francisco and San Jose and other attractive parts of the Bay because the market is crazy. People are bidding 10-30% over asking prices, some paying all cash, and without contingencies (no third-party home inspection before closing). This seems pretty dangerous to me.
  • Housing price volatility depends on the area. San Francisco properties, while much more expensive than the national average, held their value very well after 2008 and have since recovered or increased in value. The suburbs were hit harder and can be more volatile just because of fluctuating demand. Do your research, but San Francisco and The Peninsula will always be in demand as long as there are long-term tech companies that are producing value and useful technology (Google, Genentech, Intel, NVIDIA, AMD, Adobe, Tesla, probably Apple, and lots of lesser known manufacturing companies).
  • Pros for owning a house: control over your own place, tax advantages, build equity, capital gains exemption. The other advantage of owning a place is that it gives you some protection against rising rents. If you get a 30-year fixed-rate loan with payments of $3000 per month, then in 15 or 20 years, you’ll still be paying $3000 per month, but rents will probably have gone higher. Property taxes will go up, though. But in California, Proposition 13 limits them to increase only 2% at most per year, which is less than the long-term average rate of inflation, so in inflation-adjusted terms, property taxes generally go down over the long term.
  • Cons for owning a house: risk of losing money, risk of not being able to sell if price drops, maintenance costs, harder to move, can’t break lease and move in with friends/family if you lose your job.
  • The Bay area market seems really tough for three reasons: (1) prices are so high that you will be paying a lot, (2) when prices are high, if they fluctuate, you stand to gain or lose lots of money, and (3) the computer industry can have a boom/bust cycle to it.
  • Why is owning a house an intrinsic good?
    • Traditional answers for people:
      • It is a retirement plan: the aim is to own a place outright by 65 so you won’t be paying rent after you retire and live off retirement funds. You don’t have to live in the same place forever from when you’re 30, but if you’re choosing conservatively and wisely, your mortgage equity (the wealth you own in real estate) travels with you if you move to a different house.
      • Owning means you are building an asset. In an emergency, you can sell and have something. If you’ve been renting, you won’t have an asset in property.
      • Mortgage interest and property tax are tax deductible, so for much of the life of your mortgage, you pay less tax, and this is designed to make owning competitive against renting.
    • The government wants you to own:
      • For the above reasons, so you are self-sufficient.
      • For property tax, and every time a property changes hands, it gets reassessed, so usually more tax income.
      • Because home ownership should reduce crime and improve property value, and thus increase taxes and reduce expenses. Owners and communities of owners have “skin in the game” and want to maintain or improve a neighborhood.
  • There is a steady stream of wealthy applicants applying for apartment units: $500,000 yearly income (dual), $300,000 cash in the bank, and perfect credit. At least 2 or 3 applicants like this for pretty much every available apartment unit. Why are these applicants applying to rent an apartment? They get outbid on $1,500,000 places by all-cash buyers. This is in San Francisco, Peninsula and Palo Alto.
  • These information were collected from Reddit.com.

 

 

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