Buying a Second Home

Archived Q&A and Reviews



Buying a second home in a better school district

July 2012

Our family currently has 2 kids in private school, one in elementary and one in middle school. Due to 2 recent unexpected financial setbacks we realize we can't keep them there, and we need to figure something out fast. Our assigned public schools in our crappy East Oakland neighborhood are too low-performing (and possibly dangerous)to be acceptable to us. With our current mortgage payments being quite manageable and interest rates so low, we think we could swing the purchase of a little [second] house in a good school zone in Castro Valley. However, we don't want to move there. (Though our current neighborhood has way too much crime, our house is large, full of character, and sits on a quarter acre, which is invaluable to our extensive horticulture pursuits.) We've thought about buying a house in Castro Valley, renting it out to someone else while we stay in our current Oakland home, but using the address to get our kids into Castro Valley schools. When the kids are out of high school, we'd sell the second home, thus gaining back at least some of our nest egg instead of simply having spent it on private schools. We know how angry people get when others use false addresses to get into good schools, and wouldn't want to be perceived as cheating a true resident out of a school spot, but we figure this wouldn't be cheating because we'd be paying property taxes in Castro Valley. Is this a workable idea? Would it be unethical in any way we haven't foreseen? Worried about our kids' future

Blatantly dishonest. Probably even illegal. Dick

Hi, there is a family in my school doing that. It is very sad watching the mom remind her child to lie about where she lives. Your kids will have to lie for many years, and will their friends have to lie for them too after coming over? Something to consider. Teaching honesty

You really need to live in the neighborhood where your child goes to school for two reasons:

-The school districts have gotten stricter and do verify where you live.

-Your child will want playdates with other kids at school and those parents will find out that you don't live in the district.

If I was going to buy a home for a my child to go to a better school I would not pick Castro Valley school district. I would pick San Ramon which has safe and award winning schools, some which have been featured in Newsweek. Castro Valley Schools are just ok. Joy

I am a SAHM of two in the CV district. We can't afford to buy--we rent and pay a premium to live in an area with a fantastic school. We give up a lot to live here. This educational opportunity is worth it to us. Our landscaping sucks, we live in a characterless house, and we make the best of it.

I have had a friend, whom I really liked and cared about, who was cheating the system and using a friend's address. While I have great affection for her, my level of respect for her diminished. I also have disdain for the system that tempts otherwise good people to cheat. All the while I consider children in more impacted school districts who have a lot more on their mind than whether or not their parents enjoy a fantastic garden. Your children are no more important than these children.

Do the right thing and play fair. Maybe consider renting the home in CV and renting out your Oakland home. Kari

Unless Castro Valley is very different from Oakland, you aren't going to be able to get into schools there without showing proof, including utility bills, etc., that you actually live at that address.

Instead, check into the program in Oakland where you can apply to schools all over Oakland for your kids. Unfortunately, the application period starts in February and I don't know what you can do before then, but check with the district and see if there are any possibilities, particularly if the school in your neighborhood are labeled under any of the ''improvement'' laws where kids in the neighborhood are guaranteed the right to apply to other schools. By the way, there are some very good public schools in Oakland; my daughter went to Sequoia and my granddaughter starts kindergarten there in the fall. Lots of parent involvement, and the place looks like the U.N because of the diversity. Barbara

I think you're going to get a real smacking from some respondents, so I'll try not to go all ballistic on you. But please consider these points/suggestions:

My siblings and I went to the same middle-class, white-bread, academically sound schools. Two of us finished college, married, and have led stable lives, including good careers and paid-up mortgages. The other two are substance abusers who don't pay their debts, and took handouts from our hard-up mother until her death at 98. Wherever they're educated, your children will ultimately do what they want to do.

If you can afford a second home, you can afford academic enrichment and self-defense lessons for your children. The kids would commute from Oakland to Castro Valley? How? BART? Wouldn't you worry about them? Car? Wouldn't you rather spend that time on your horticultural pursuits? Perhaps there is a medium-sized house with a big back garden in Castro Valley. (I have a friend with such a house.)

Most important, at this point in their lives, your children look to you for guidance and, especially, for a good example. How are you going to explain your slumming to them? ''Sorry, kids, we love cultivating our nice, affordable garden, but you're just too special for the rest of this squalid 'hood?'' I apologize for my sarcasm, but I hope you rethink this situation, because your ethics are indeed on shaky ground. Melanie

One thing to think about is that you'd have to ask your children to keep a secret from their friends, and in fact lie about where they live if necessary. No play dates with school friends at your house. If word gets out (e.g., your kid's close friend lets it slip to a not-so-close friend whose parents have strong feelings about residency) you might get reported. I don't know about Castro Valley, but in my school district, kids that are discovered not to be living in the district are kicked out of school immediately (meaning, that very day). Most parents wouldn't call, but some would, especially if their kid has some kind of unrelated problem with the fake-address kid. Also worth noting: your renters will have a little leverage, b/c they will have to agree to receive all the school mailings at their address, and they could decide to report you, too. So don't make them mad at you! Anon

Unfortunately, while this might not feel like cheating, it still is according to school district policies. Seats are for children who live in the district--not for children whose families own homes or land there. (Just think of how many people you'd see buying small studios in Piedmont or Mill Valley if they could then use those addresses to send their children to school there!) If you buy a second home and rent it out, the children of the renters can legally attend school there, but as long as your children are still living in your Oakland home, they cannot. Ethics aside, you also run the risk that the Castro Valley school might pick up on this and do a home check to see if you really live there.

If you're committed to staying in your home in Oakland, why not take a look at some of the nearby charter schools? There are several new schools at the elementary level and a few good options for middle school too. No guarantees on admission, but definitely worth a try. Good luck! Another Oakland parent

I'll be the first to say that the inequity of the schools in this area is a huge problem, and that EVERY child deserves a quality education, regardless of the location of his housing. I've worked in education in the Bay Area for years, and inequity is our number one problem. That said, I'm vaguely disgusted by the notion that you would think of my local public school as a commodity to which you could pay ''tuition'' via the mortgage on a house.

I see the logic in your attempt to justify your actions, but property taxes aren't really the issue. It would irritate me to no end to think that someone bought a house (bought a house!), schlepped their kids here to be taught, but didn't live here. My kid will want to be your kid's friend, but will never be able to play together outside of school. Very likely, you will not attend school events, from fundraisers to PTA meetings, and will not be available to volunteer because of the distance of your home. I'll be there every week, working in the classroom and out, to support your child and mine, while you would be miles away. I know that not every parent can be so present, and I am for the sake of the parents who can't because they are my neighbors and my friends. Our kids will grow up together, will see each other not just at school but at the park, at summer camp, at the movies. There are reasons that we have neighborhood schools. Proximity matters for your kids, too.

Bigger districts have hunted down this kind of behavior; I'm not sure Castro Valley USD would, but given the small town atmosphere and small (some very small) elementary schools, I would not be surprised if you weren't discovered pretty quickly, especially in impacted schools like mine. The district has significant trouble handling local residents whose zip code is Castro Valley but their district boundary is Hayward....The whole system is a mess and a half, but I can't imagine how your personal solution makes it better for any of us.

I gave up my Oakland house to move to Castro Valley for reasons other than the schools, but it has turned out that we are here for schooling. It has also turned out that this is a pretty decent place beyond the good schools. It seems that good schools are run by, attended by, and supported by, pretty decent people.

Consider the options that are beneficial not just for you, but for your kids and mine. Maybe home school them until your situation improves. Maybe find a school in an area that you do want to live, and move there? If you can afford a house in my neighborhood, perhaps you can afford a tuition at a cheaper private school? I just can't imagine how buying your way into a public school district is a good solution for anyone. Long-time teacher and CV mom

I confess - the idea of commuting my kids from Oakland to Castro Valley everyday doesn't sound appealing to me. I know that wasn't really what your question was about. This would be my suggestion. Find a big house and big lot in Castro Valley (not that hard I'm sure) and move there for the schools. Bonus: The gardening weather is great. Rent the house in Oakland if you really want to keep it. This would allow the kids to meet the local school kids and grow up in a safer, cleaner environment. These are all good things. Good luck anon

School choices in Oakland can be really tough! There may be better alternatives than buying a home in another district, though. We thought through many options including buying/renting/moving to another district, and found several options here in Oakland that are better than moving or buying a second home. There are a couple of really great charter schools in Oakland, and it has been much easier than expected to get into another OUSD elementary school that is excellent. If you go in person to the OUSD Student Assessment and Bilingual Testing Office (SABTO), the people there will be able to tell you how to enroll, let you know which schools are the ''hidden gems'' that you are likely to be able to get your children into this fall, tell you how to get on the waiting list for your top choice school, and let you know how far down you are on the waiting list. The SABTO maintains the waitlists for all schools, and they are also the ones that call you with the happy news when a spot opens up for your child (which can be as late as the 2nd week after school has started). Seriously, the people in the OUSD SABTO are really nice and helpful. Also, you can look up charter schools on to find one that might be a good fit for you. There are two charter schools that are too new to be listed yet, but might be worth looking at for your elementary age child: The Community School for Creative Education and Urban Montessori. Personally, we thought the downsides to buying a second home were not worth it: driving our kids to everything which would end up limiting their activities and involvement, it will be harder for our kids to make close friends because of the distance, feeling guilty, and most of all, the schools might not be any better! Best of luck to you! Oakland School Mom

How about two residences? Rent out rooms in the Oakland house to like-minded people and you can maintain the house and yard? (International students, environmentalists, naturalists, parent/kid, etc.) You can rent in another district and try it out before buying (using Oakland rental income). See how it goes and what other options may develop. There are people who want to rent together - maybe that would be an option in another district and then you have your house in Oakland on the weekends. There are cottages for rent (lots in Danville and Alamo) and rooms in big houses in Windemere who would love a 'commuter' family like you. We have several friends who have more than one residence! susan

Buy a second home to supplement retirement?

May 2012

We currently own a home in Berkeley and are on a 30 year mortgage (the banks owns it, I guess). My husband just got a job that just coveres our living expenses and we are in the incredibly lucky position of being able to save most of my income. We hope to save by the end of next year (2013) 70-80k, which I hope can be a downpaymnet on a second home. The hope is that retirement time (in 25 years) we'll have paid both off and will have rent to supplment out SS income. Couple of questions: 1. Is this a good retirement strategy? We will have some other retirement savings (401k, etc) but hoping that rental income will provide us money to live on in our retirement years. Can people who use rental income or hope to use rental income tell us how that's working out? 2. How do we even get started researching where to look? Should it be in the same city we're in? or other cities? Given the real estate crash should we not even look to real eastate as an investment? Thanks for sharing any personal stories or advice. Saver ant

Buy it later! You are not in the position financially to buy another house and rent out your current home. It would be irresponsible to do so, even with decent income and good credit. Many lenders would not even give you a loan for a second residence in your situation. Rightfully so, too. Fortunately, lenders are more thorough these days. Landlord

My husband works in an investment company and this is his opinion: I have heard good and bad opinions about buying a second rental home as a retirement investments. Not everyone is alike and that's why hiring a good reputable financial planner is a good idea before making such investments.

There are other costs associated with second homes, more importantly taxes and been able to pay the mortgage when the second home is not rented

Good luck RR

I own a home in another state which is rented out and another one abroad, which is only used occasionally. It is NOT a retirement strategy for us, just how things played out, and they are paid off. I worry a lot about what if something happens to the homes... I don't think real estate is necessarily the best investment strategy-always smart to diversify. Make sure it's not your only investment vehicle. If you do rent out in another real estate market, make sure you do credit checks and have a company or trusted & experienced friend keep an eye on things and take care of maintenance issues as they arise.

You are smart to save your income & pay the bills with your husband's income. We've been doing the same for years and it has really helped. Make sure you are putting away the max into your retirement and into his as well. I'm not sure the max for a 401k, because we've used a SEP for so long, but put that money away-tax free! I think it's really important to think of your retirement first, because experts will always tell you that you can't take out a loan for your retirement, but your kids can always take out loans for college. Also, I'm being conservative and counting on NOT getting Social Security. Maybe once you max your 401k, you can put away XX for your kid's college fund.

One thing you could consider is paying off one extra mortgage payment on your 30 year loan yearly. That cuts off 7 years off your loan! Bankrate has some great calculators to play around with the numbers-check it out for different college, retirement, and mortgage scenarios. Good luck! anon

I'm not an expert but I've always heard that diversifying is a good strategy, so if you are doing the other retirement savings, this sounds like a good opportunity. I'd maybe suggest you look into what this means in terms of taxes (you have to pay taxes on this income -as opposed to some retirement accounts, you can't deduct mortgage interest in the same way you do for your main residence, and you can deduct certain things since this will be a rental ''business''--you need to file schedule E and can deduct and depreciate various things).

In terms of researching where to look, I would look into areas that are easy to rent and will cover your expenses (mortgage, insurance, property taxes, taxes, etc.). You can check craiglist. We rented in Lower Rockridge and had great luck, the good thing about Berkeley & its surroundings is that there are a lot of grad students you can rent to, as long as it is a reasonable price. My feeling is also that you make more money for small places (1-2 bedrooms) than for large ones (3-4 bedrooms)--but again, check craiglist to see what is the range people are working with. Definitely live nearby or, if not, get a property manager (or get a property manager if you are not into managing it yourself--if you are, you need to have a list of reliable and affordable services such as plumber, electrician, etc. EP