Submitted by nostradamus on June 16, 2008 - 10:51pm
I'm considering buying some rentals. Any ideas on where rent is headed? I can see that there are many investors trying to scoop up "deals" in Mira Mesa.
We are also looking into buying a rental. FWIW, we are looking in Vista and I have found there to be a lot of rentals available on craigslist. In one community (Moncado Springs, next to costco) that we rented in last year, it took us 2 months for a rental to become available. Last night I looked on craigslist and there are 4 available. And the development we live in currently in South Carlsbad has 4 houses also for rent (it's not a big developement). I don't know if it's the season...just some more to think about (as if there wasn't enough :) )
Submitted by nostradamus on June 17, 2008 - 9:42am.
Thanks waitingpatiently.
I did an informal kind of poll: There's one particular condo I'm looking at which will be slightly more than break-even; that is, it will cash flow slightly positive if my calculations are correct.
So I went over there, and I fortunately saw one of the neighbors walking around outside. I chatted her up and found out she's renting for a few hundred dollars more than what I'm targeting. She also said she felt lucky to have gotten this deal on the place and that she shopped around a lot before finding it. She kindly gave me the address of the unit she's renting, and I looked it up to find what it last sold for. It sold last year for $100k MORE than the asking price of the unit I'm looking at! Those landlords are definitely not flowing positive, even though they're charging more rent. I also ran into another neighbor, a couple, they weren't as informative but did tell me they were renters and paying about what I'm going to charge, but they are in a smaller, downstairs unit (I'm looking at an upstairs one).
Another thing I did, of course, was look at craigslist. There is only one other place for rent in that complex and they're asking for more than what I'd ask for. Their unit is also downstairs and not as nice and in a worse location.
My conclusion from the hunting expedition is that if I can get the sale price I want (which I think is a fair price) then I'm going for it. My only worry is if rents go down, although I have some margin to work with.
Renters: do you prefer upstairs units or downstairs? I know moving furniture is a pain if you're upstairs, but once you're in I hope: a) you won't move out, and b) you enjoy not hearing your neighbors walking around above you.
Nostradamus: You were wise to walk the neighborhood and talk to residents.
This is the single most important and most overlooked way for buyers to learn quickly about the huge decision they are considering. You will invariably pick up usefull information no broker will tell you--about rents, physical defects, demographics (ahem), crime incidents, trends of all sorts. Plus, you may be pleasantly surprised (or not) to meet the next door neighbor in advance.
Submitted by nostradamus on June 17, 2008 - 10:16am.
BobS I agree, going there was much more fruitful than seeing it online. Now I know exactly what the place looks like (much better than the photos). I know it's a very dog friendly neighborhood where people actually pick up after their dogs, the plumbing is copper pipes, the place is well-maintained inside and out, the neighbors are working professionals and there was no junk or external clutter, it was sheltered from any road noise, the bedroom windows overlook a canyon to the east and can enjoy a nice sunrise, and people enjoy living there. Some of the people I spoke with have been living there for years. There is an Iranian man living next door on one side and an American couple on the other side, downstairs is an Indian couple, there's another Iranian couple next to them, there's a bmw-driving white lady with a Yorkie, there's a friendly couple with a big shelter mutt, and through an open window I could hear someone playing the harp. There were no children or toys whatsoever near the unit, but near the well-maintained pool area there were three dads with their toddlers. I couldn't get much of this info online but all of it has helped in my decision.
As as renter, I much prefer living upstairs. Two reasons: one, I don't want the clomping of neighbors overhead, and two, I like to open my windows at night, but I'll only do it if my bedrooms are upstairs (and not located on the veranda, obviously). Yes, moving furniture is a pain, but you only do it once, and the benefits of living upstairs are many.
It sounds like this deal is potentially a good one! Good on you for doing the research.
Submitted by nostradamus on June 17, 2008 - 11:11am.
Thanks for the feedback atr and flu. There are many good reasons to get an upstairs unit.
Any idea why anyone would ever prefer a downstairs unit? Unless you're scared of heights or elderly or in a wheelchair, why would you prefer to live downstairs?
Walking around the area and talking to people is a great idea! I am going to have to remember that when we get ready to buy. I think that we (my husband and I) have decided that we will wait another year to buy our rentals and our primary residence. I am definately seeing prices/rental work out cash postive on paper but with a very small margin or error.
Good Luck on your search.
When we rented in an apartment I preferred the bottom units because we had kids and was terrified that they would fall out of the window or off the balcony.
I have had friends with younger children that preferred first floor units so that they didn't have to deal with stairs regularly, particularly if bringing in groceries or whatever with a child or two in tow. Personal preference, I guess.
Submitted by pabloesqobar on June 17, 2008 - 12:22pm.
It depends on the particular complex for me. I've noticed that in some complexes the downstairs units come with a rather substantial patio - compared to the upstairs ones that only have a narrow balcony. A buddy of mine has a downstairs unit like this. He is able to entertain outside and have great parties. The guy above him has a very narrow, nearly useless balcony. So, in that complex I would prefer to live downstairs.
Thanks for the feedback atr and flu. There are many good reasons to get an upstairs unit.
Any idea why anyone would ever prefer a downstairs unit? Unless you're scared of heights or elderly or in a wheelchair, why would you prefer to live downstairs?
nostradamus, I actually prefer downstairs. A couple of reasons are, moving, stroller (if you have babies), and I just hate stairs.
Are there any web sites like piggington geared towards those looking to but rental properties??? It might be nice to get some discussions going about multi-unit properties and things like rents, cap rates, cash on cash returns , etc. Also common management issues and the like...
Are there any web sites like piggington geared towards those looking to but rental properties??? It might be nice to get some discussions going about multi-unit properties and things like rents, cap rates, cash on cash returns , etc. Also common management issues and the like...
Hahaha. I tried to do it here, but there wasn't a lot of interest at the time. Although I probably admit it was more because most people weren't in a buying mood for SFRs and condos, much less multi-units.
I even posted my ROE calculator for people to do cash on cash and cap rate calculations on. Hahaha.
Submitted by nostradamus on June 17, 2008 - 4:32pm.
surveyor it works, I was able to download it. You can now post the xls on this website according to Rich's list of new features. Here, I'll try it for you:
rents!
We discussed the issue awhile ago in these topics:
http://piggington.com/will_rents_create_...
http://piggington.com/where_rents_are_he...
http://piggington.com/what_do_you_folks_...
Cool! That's what I was looking for. Thanks!
Nostra-
We are also looking into buying a rental. FWIW, we are looking in Vista and I have found there to be a lot of rentals available on craigslist. In one community (Moncado Springs, next to costco) that we rented in last year, it took us 2 months for a rental to become available. Last night I looked on craigslist and there are 4 available. And the development we live in currently in South Carlsbad has 4 houses also for rent (it's not a big developement). I don't know if it's the season...just some more to think about (as if there wasn't enough :) )
Thanks waitingpatiently.
I did an informal kind of poll: There's one particular condo I'm looking at which will be slightly more than break-even; that is, it will cash flow slightly positive if my calculations are correct.
So I went over there, and I fortunately saw one of the neighbors walking around outside. I chatted her up and found out she's renting for a few hundred dollars more than what I'm targeting. She also said she felt lucky to have gotten this deal on the place and that she shopped around a lot before finding it. She kindly gave me the address of the unit she's renting, and I looked it up to find what it last sold for. It sold last year for $100k MORE than the asking price of the unit I'm looking at! Those landlords are definitely not flowing positive, even though they're charging more rent. I also ran into another neighbor, a couple, they weren't as informative but did tell me they were renters and paying about what I'm going to charge, but they are in a smaller, downstairs unit (I'm looking at an upstairs one).
Another thing I did, of course, was look at craigslist. There is only one other place for rent in that complex and they're asking for more than what I'd ask for. Their unit is also downstairs and not as nice and in a worse location.
My conclusion from the hunting expedition is that if I can get the sale price I want (which I think is a fair price) then I'm going for it. My only worry is if rents go down, although I have some margin to work with.
Renters: do you prefer upstairs units or downstairs? I know moving furniture is a pain if you're upstairs, but once you're in I hope: a) you won't move out, and b) you enjoy not hearing your neighbors walking around above you.
I always rented upstairs for the latter reason.
Nostradamus: You were wise to walk the neighborhood and talk to residents.
This is the single most important and most overlooked way for buyers to learn quickly about the huge decision they are considering. You will invariably pick up usefull information no broker will tell you--about rents, physical defects, demographics (ahem), crime incidents, trends of all sorts. Plus, you may be pleasantly surprised (or not) to meet the next door neighbor in advance.
BobS I agree, going there was much more fruitful than seeing it online. Now I know exactly what the place looks like (much better than the photos). I know it's a very dog friendly neighborhood where people actually pick up after their dogs, the plumbing is copper pipes, the place is well-maintained inside and out, the neighbors are working professionals and there was no junk or external clutter, it was sheltered from any road noise, the bedroom windows overlook a canyon to the east and can enjoy a nice sunrise, and people enjoy living there. Some of the people I spoke with have been living there for years. There is an Iranian man living next door on one side and an American couple on the other side, downstairs is an Indian couple, there's another Iranian couple next to them, there's a bmw-driving white lady with a Yorkie, there's a friendly couple with a big shelter mutt, and through an open window I could hear someone playing the harp. There were no children or toys whatsoever near the unit, but near the well-maintained pool area there were three dads with their toddlers. I couldn't get much of this info online but all of it has helped in my decision.
Nostradamus--
As as renter, I much prefer living upstairs. Two reasons: one, I don't want the clomping of neighbors overhead, and two, I like to open my windows at night, but I'll only do it if my bedrooms are upstairs (and not located on the veranda, obviously). Yes, moving furniture is a pain, but you only do it once, and the benefits of living upstairs are many.
It sounds like this deal is potentially a good one! Good on you for doing the research.
There is one main reason why I would prefer a rental property on the upper floor. Simple... Flood damage.
Thanks for the feedback atr and flu. There are many good reasons to get an upstairs unit.
Any idea why anyone would ever prefer a downstairs unit? Unless you're scared of heights or elderly or in a wheelchair, why would you prefer to live downstairs?
Nostra-
Walking around the area and talking to people is a great idea! I am going to have to remember that when we get ready to buy. I think that we (my husband and I) have decided that we will wait another year to buy our rentals and our primary residence. I am definately seeing prices/rental work out cash postive on paper but with a very small margin or error.
Good Luck on your search.
When we rented in an apartment I preferred the bottom units because we had kids and was terrified that they would fall out of the window or off the balcony.
I have had friends with younger children that preferred first floor units so that they didn't have to deal with stairs regularly, particularly if bringing in groceries or whatever with a child or two in tow. Personal preference, I guess.
It depends on the particular complex for me. I've noticed that in some complexes the downstairs units come with a rather substantial patio - compared to the upstairs ones that only have a narrow balcony. A buddy of mine has a downstairs unit like this. He is able to entertain outside and have great parties. The guy above him has a very narrow, nearly useless balcony. So, in that complex I would prefer to live downstairs.
Any idea why anyone would ever prefer a downstairs unit? Unless you're scared of heights or elderly or in a wheelchair, why would you prefer to live downstairs?
nostradamus, I actually prefer downstairs. A couple of reasons are, moving, stroller (if you have babies), and I just hate stairs.
Thanks! Yes, the downstairs units definitely have larger patios, and it is surely safer for kids. Good to know!
Are there any web sites like piggington geared towards those looking to but rental properties??? It might be nice to get some discussions going about multi-unit properties and things like rents, cap rates, cash on cash returns , etc. Also common management issues and the like...
Hahaha. I tried to do it here, but there wasn't a lot of interest at the time. Although I probably admit it was more because most people weren't in a buying mood for SFRs and condos, much less multi-units.
I even posted my ROE calculator for people to do cash on cash and cap rate calculations on. Hahaha.
I don't see why we can't discuss that kind of thing here. It's all about housing!
surveyor - do you mind posting that ROE calculator or a link to it (I guess I can try the search feature)...
thanks
here ya go:
http://piggington.com/surveyors_roe_calc...
I can't test the link if it still works. My office is blocking it. I'll test it when I get home...
LTR,
Have you been to the SDCIA site? All the topics you mentioned are discussed there regularly.
surveyor it works, I was able to download it. You can now post the xls on this website according to Rich's list of new features. Here, I'll try it for you:
wow..thanks rustico and surveyor....I appreciate your time and posting of the great spreadsheet and information!!!!