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Buy in DC metro area or DFW area?

Hi everyone, I have been living in the DC metro area for 8 years. Rent is sky high compared to other cities and of course so are the home prices (especially if you need a metro accessible property, which I do). My rent is currently $1800 and I'm starting to feel like I'm throwing money away. So I've recently started looking to buy a condo but the prices in the most affordable location for me are $300-350K for a one bedroom+ den. Another alternative is to buy cash (about $150K) in another state (TX is an option because I have family there) and rent out the property (rent would probably be $1000-1500) to off-set my rent in DC. Which would be the better option? Buy in DC metro or DFW metro? 
  • September 15 2013 - US
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Answers (2)

Hard for anyone of us to help with that decision.  In theory buying a home in DFW seems like a solution.  If you buy a home for investment without a mortgage then the income from that property ie: $12,000 - $18,000 per year adds to your taxable income.  Reduce the yield by the tax you will owe.  Perhaps that added income throws your regular income into a higher tax bracket and the net affect actually causes you to pay more annual tax.

If you buy a property in the DC area with a mortgage the interest and real estate taxes are deductible on your federal return.  Now you have less taxable income.

Just a thought.  You might want to get an accountant to help you compare the two scenarios.
  • September 16 2013
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Hi, there! The DC marketplace is extremely hot right now and consistently kept their strong values throughout the last few years. In some areas, we see an increase in value 5% year over year! If you need more help, please feel free to contact me. 
  • September 16 2013
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