I would NOT buy property in ANY area I was not familiar with, especially not investment property. You may not like Austin, but the Bay Area is so prohibitively priced, you can travel when you feel constrained!

Yes, people in the Bay Area DO sometimes have a significant commute. I just can't see doing what you want to do.

Have to agree with Anglophilia. What happens if you buy now and the market falls again?

And getting a loan for a non-owner-occupied condo is not easy. And condo HOAs often limit the number of units that can be tenant occupied, as well.

I would never buy property in a place I thought I'd be moving to later. Too much risk/possibility that life will happen and you'll not move there.

I will say I was somewhat amused that you do not like the climate - the Texas Hill Country (and Austin is on the eastern edge of that) is actually one of the nicest climates in Texas - one of our 'posters' (Pattycakes) is actually from CA - both she and her son moved to Texas so the son could afford to buy a house!

Why not consider Arizona, Colorado, Utah, or New Mexico? Or else consider somewhere other than the Bay area (SF)? Farther North of SF it is considerably less expensive (although I certainly would never move somewhere if the state was verging on bankruptcy and the governor had just increased the gasoline tax appreciably).

I'm planning on getting out of CA after DH retires. The weather isn't enough to keep me here, even though we live in the desireable/expensive towns.

hikingfan, how old are you? All the younger people I know seem to really like living and working in Austin.

I'm guessing the OP is in the tech industry so more job opportunities near SF and the Valley.

I'm curious how long the OP has been in Austin though. I agree that during the summer the weather is miserable to be outside, but there are generally 8 months of great weather (although a few bad days mixed in). This year has been milder too up until June so unless the heat/humidity stay past mid September it might actually be 9 months of good weather. Depending on where one comes from one may need to acclimate some to the warmer temps.

As for buying something and live far away, it could go real well or it could not. If prices keep increasing then it could turn out to be a good thing as even if it is in a location where you end up not wanting to live you can always sell it and buy something else using the equity. However, if the market goes down and you don't have good quality tenants then it could be a loosing proposition and you might end up with a very long commute depending on where you end up working in relation to the property.

(I must say that I've no idea about neither Austin nor San Rafael, and my comment is not about whether OP's idea is great or not (let's say personally wouldn't do it)..but it'd drive me a little crazy if I'd tell I want to live in place X and people would start telling my "why? Y is a great place, and other people love it"

probably because I got it a lot in my life. Moved a lot, you know. Many places are great, and work amazingly well for lots of people-but it doesn't mean it works for me. Travel is one thing-I love it all. (unless it's cold and icy)) Staying put is another thing.

Of course the OP might feel totally different in a year or two toward Austin..you never know. Some places conquer you right away. Some slowly creep in your heart to stay. Some, you'll get used to but will always want to move.

I met many great guys but it didn't mean that I had to marry them all, right? There's difference between love and appreciation.

(as for the weather-I really love SF, and would theoretically consider moving because of friends and family..but the weather wouldn't be the drawing factor for me personally-I find that it's chilly as hell lol.

it's really very personal. some things are quite intangible too.

like where you feel you belong.

many times, you don't have much choice as for where to be.

but if and when you do-that's quite a blessing)

Why do you want to purchase a long distance property and be a long distance landlord for next 2-3 years?

Is it because you need tax write off for your income? Assume renting in Austin is by default.

It may be easier to compare two scenarios, purchasing a rental vs investing money associated with the rental acquisition.

Purchasing a rental:

It should not be too hard to figure out how much mortgage you could carry based on your income/expense. Then you could figure out the transaction cost (round trip commission and closing costs if you buy and sell), mortgage payment, property tax, insurance, rental income, rental management fees, travel expense to your property, cost for potential fixes and repairs, vacancy ratio. Don't forget to include opportunity cost of your downpayment and income tax advantage by owning a property. Since you plan to leave Austin in 2-3 years, it is likely all these initial transaction costs will wipe out any potential gains/appreciation of the rental property if there is any.

Investing:

You could figure out how much potential return you could get by investing the money in equity and bond markets. Keep in mind, if things go wrong, it is so much easier to withdraw your holdings than dump a property.

The result should tell you if you should get a rental. After 2-3 years, with cash in hand, it will give you the freedom of moving to any place you desire.

Wow, I didn't expect that many answers, thank you all so much!

You brought up valid and good concerns and I will reflect on this for now.

To answer some questions from above: I'm in my mid 30's and yes, I work in tech. I also love the ocean and mountains. And I really mean it - I do love both. A lot. The reason why I'm looking at the Bay area becomes more transparent... The alternative could be Seattle, but I don't like that much rain - and yes, I lived there for quite a long time before. The only third alternative would be LA or NYC, but that is even further away from reality, than SF (cost-wise) :) Weather-wise, I prefer cool and I don't like hot. I don't even mind when it snows. And yes, I've been to Austin for only half a year, but... It still doesn't feel like home so far.

So... For now I'm just trying to figure out what's my next destination. I really appreciate your inputs, guys! It looks like I'd better keep renting for now until I figure it all out.

How about considering Raleigh/Durham/RTP in North Carolina? You would have mountains 3 hours west and ocean 2 hours east. Best of both worlds and a major tech hub. Climate is generally moderate...but not cool per se. Very affordable COL.

If your lifestyle is a factor in choosing the Bay Area, okay, I get it. Otherwise, having lived in Northern and southern CA I wouldn't move back to that state for a million bucks. Why not take a trip there and also to N.C. as jmck-nc has suggested before you make a decision.

The only third alternative would be LA or NYC, but that is even further away from reality, than SF (cost-wise) :)

Actually SF is the most expensive cost wise nowadays.

Definitely look into the Raleigh/Durham area.

You are so young you should go to any place as you wish, as long as the area offering salary for local cost of living and good career path.

Living in high cost of living areas has its advantages.

Our child graduated and married in Bay area. At first getting a lovely place in SF was a huge struggle for the young couple. But in recent years their incomes, and equity of the first place easily allowed them to get 2nd home in any city of their choice.

If you want to move to SF and you can afford it and get a job there, then you should. I dont know enough about buying a second place there though. I suppose if you can afford it, can rent it out to cover mortgage payments, and can find a good management firm, why not? Just be prepared that if the market fell, your condo may lose equity and tenants. Another risk is if your new job is too far of a commute from the condo.

You could always choose Cape Town. Mountains and LOTS of beaches. And, tech (that is why we're here now, from Seattle area). Lots more sun here, and very few too hot days. Basically no humidity.

You might find yourself priced out of Seattle Metro area (soon, if not now). They have one of the most booming real estate markets in the nation...

My point is, if you aren't tied to an area, and you are 30s, you have a lot to explore before you spend a fortune. We have 2 kids and still chose to come to Cape Town for a few years.

Also, generally in tech, your pay will adjust with the location you're working in. ).

So I have bought property a few times in cities I was planning on moving to in the future. When I have done this it is because I wanted specific needs addressed and I wanted the extra time to look for the perfect property.

So rather than trying to find an acceptable property in an acceptable location near your desired city, spend the time looking for a desirable property in or near your desired city. Time and patience are incredible benefits in real estate and not many people have them.

If you are getting a loan start by talking to your banker and explaining your plans. The money will really be the determining factor in your plan. Then talk to a realtor, personally I would find one who is established and is OK with the idea of keeping an eye out for a special property for you, rather than an intensive active search. Finding tenants is difficult but doable, find a property management company and plan on losing a little bit of money on the deal. Remember when it comes to tenants the nicer the house, the bigger the heartbreak when you get it back. Small, cute and functional often rent better than large and upgraded.

There is significant risk involved with your plan. That is OK but you need to make sure you are getting sufficient benefit for that risk, so only proceed when you find a special property that can reward you.

I'm from Raleigh and have been working in tech in the bay area for 5 years. I love California! NC is great in many ways, and many people love it--for me it is way too hot. Moved to California after living in different places on the east cost and realized it doesn't have to be like that! I also like Seattle, but it's not a budget location either, and most job prospects for me have been a larger pay drop than the cost drop.

I think waiting to buy is a good plan. Buying here requires big $, so much to risk in being a long-distance landlord/real estate investor. I'd recommend moving here and renting first to make sure you want to stay in the area and in which city. Then buy when you're more certain about staying long term.

Thank you all for sharing your viewpoints! I will hold on for now. I agree that buying a remote condo is not probably worth the risk. I'd better move first, spend some time exploring the area and make a decision then. I'm not in a rush at all, which helps.

In the meantime, I can always go to Colorado for hiking :)