Sunday, December 30, 2012

2202 Huntington Ln, Redondo Beach, CA 90278 at $680K

When I went to the open house, it was priced at $729K.  The real space inside felt a lot smaller than the square footage reported.  The lens of the camera made the house look a lot newer, sharper and a lot more spacious.  I was a little disappointed when I stepped out to the backyard, it was pretty small and cramped.  The master bedroom is of a good size but with wall colors and decors that reminded me of the show "The Golden Girls".  The master bathroom has tiles that are so very 80s and that need to be redone too.  One thing about having that kind of tiles is, dirt and mildew tends to accumulate on the grids easily and fast, making the bathroom look dated and dirty too frequently.  This kind of tiles require a lot more cleaning time and therefore they are not for me.   The rest of the bedrooms are all very small with wall paint that needs to be redone. Typical of most of the townhouses in North Redondo Beach, a lot of bedrooms have windows facing closely with neighbors' windows.  

At the time of the open house, I felt that $729K was too pricey for the work that I will need to do to re-decorate the interior to suit my taste. Besides, I felt cramped and I smelt stuffiness when I was inside.  It was overall not better than my upper level apartment rental that has city view.  With the property tax and my tax bracket, even after the portion that was tax deductible, I will actually need to pay the non-deductible portion of over $1500 a month for interest expense and property taxes, before homeowners insurance,  and other upkeep and maintenance expense or the redecorating expenses and the repayment of the actual principal.  That is only if I put 20% down payment.  Despite the money side, I didn't think I would want to  rent this house, let alone settling down on it with a 30 year mortgage. My rule of thumb is, I'm not going to buy a house if I don't even see myself renting it.

This is why I am still at my rental apartment.  Buying that house will cost me more cash outflows each month and tie up over $145K of money in a 30 year mortgage. For the next 10 years, what really goes into the equity of the house may be a few hundred dollars after the non tax deductible portion of the property tax and interest.  Even interest rate will be low, the size of the loan and my personal income tax bracket will still generate quite a big amount of non tax deductible interest.  Also, the property tax is very high and will continue to increase. Redondo Beach has a huge burden of future obligation for pension and health benefits for the city employees, I just don't know what's going to happen when the city finally runs out of money to fund them... This creeps me out whenever I consider whether or not I should buy a mere townhouse at over $700K...This house eventually was sold at $680K, not to a first-time home buyer, but to a wealthy investor.