HOA looks steep for that value of condo, but I’m sure you are correct.
Are you sure you can get a 5% loan as a non-owner occupier?
You sensibly plugged in $150/mo for maint, which also presumably includes vacancy allowance.
All in all, depends on your personal/tax situation, plus whether we are at a bottom in prices or not.
To paraphrase Mark Twain, commenting on investing in stocks:
“The way to make money is to buy when the price is low, wait for it to go up, then sell it.”
“If it doesn’t go up, don’t buy it.”

HOA looks steep for that value of condo, but I’m sure you are correct.
Are you sure you can get a 5% loan as a non-owner occupier?
You sensibly plugged in $150/mo for maint, which also presumably includes vacancy allowance.
All in all, depends on your personal/tax situation, plus whether we are at a bottom in prices or not.
To paraphrase Mark Twain, commenting on investing in stocks:
“The way to make money is to buy when the price is low, wait for it to go up, then sell it.”
“If it doesn’t go up, don’t buy it.”

I like your numbers, close to 100x rent multiplier. People trash talk condos as investments but that hoa takes care of some crap you would have to pay for if it was an sfh. trash, exterior water, landscaping, fire insurance, etc. it comes out in the wash, if your rent numbers are right and can get it for that price, you are close to rent nuetral from the start, a good sign. In ten years, it’s a flowing cash cow, if you put in the work and have the reserves for bad months and problem tennants.

I think the best way to evaluate a potential investment rental is by running the numbers and assuming it will never go up in value. Too many people factor a few years of survival and a windfall from appreciation, if that appreciation never comes, what then? Your scenario looks good, make sure the loan is fixed so in a decade or two, you’ve actually paid down the loan, never refi, never take cash out, once it rents for more than it costs, bank the difference, but don’t spend it. When that builds up, at the next downturn, buy another, lather, rinse, repeat, in 30 years you own a few of them outright, by using the cash flow from the oldest to pay down the newest. I stole this little strategy from my parents, they are retiring and are pretty happy with how things went, it wasn’t easy and it wasn’t quick, but it works.

I like your numbers, close to 100x rent multiplier. People trash talk condos as investments but that hoa takes care of some crap you would have to pay for if it was an sfh. trash, exterior water, landscaping, fire insurance, etc. it comes out in the wash, if your rent numbers are right and can get it for that price, you are close to rent nuetral from the start, a good sign. In ten years, it’s a flowing cash cow, if you put in the work and have the reserves for bad months and problem tennants.

I think the best way to evaluate a potential investment rental is by running the numbers and assuming it will never go up in value. Too many people factor a few years of survival and a windfall from appreciation, if that appreciation never comes, what then? Your scenario looks good, make sure the loan is fixed so in a decade or two, you’ve actually paid down the loan, never refi, never take cash out, once it rents for more than it costs, bank the difference, but don’t spend it. When that builds up, at the next downturn, buy another, lather, rinse, repeat, in 30 years you own a few of them outright, by using the cash flow from the oldest to pay down the newest. I stole this little strategy from my parents, they are retiring and are pretty happy with how things went, it wasn’t easy and it wasn’t quick, but it works.

I like your numbers, close to 100x rent multiplier. People trash talk condos as investments but that hoa takes care of some crap you would have to pay for if it was an sfh. trash, exterior water, landscaping, fire insurance, etc. it comes out in the wash, if your rent numbers are right and can get it for that price, you are close to rent nuetral from the start, a good sign. In ten years, it’s a flowing cash cow, if you put in the work and have the reserves for bad months and problem tennants.

I think the best way to evaluate a potential investment rental is by running the numbers and assuming it will never go up in value. Too many people factor a few years of survival and a windfall from appreciation, if that appreciation never comes, what then? Your scenario looks good, make sure the loan is fixed so in a decade or two, you’ve actually paid down the loan, never refi, never take cash out, once it rents for more than it costs, bank the difference, but don’t spend it. When that builds up, at the next downturn, buy another, lather, rinse, repeat, in 30 years you own a few of them outright, by using the cash flow from the oldest to pay down the newest. I stole this little strategy from my parents, they are retiring and are pretty happy with how things went, it wasn’t easy and it wasn’t quick, but it works.

Exc. advice Temeculaguy, but I’m concerned about the high HOA fee if there isn’t any amenities for this $$ such as pool/jacuzzi/gym.

Trash for an SFR (if you only allow the smallest – 39 gal. receptable) is about $13 mo. for weekly p/u. (wrapped into prop. tax “People’s Ordinance” in the City of SD where RB is located); water (if no lawn) can be as low as $25 mo.; fire ins. with $1000 ded. for a “replacement value” policy on a $140K condo can be as low as $32 per mo.; sewer as low as $17 mo.; Landscaping svc. as low as $60 per mo.; That adds up to $147 mo. for a 2br/1ba (most likely 1 ba) older-home rental – maybe $170-175 if there is a “postage-stamp” lawn that needs watering plus added fire ins. for an SFR. I would also be concerned here about future HOA hikes as well as special assessments.

However, I don’t see a 2 br/1ba house costing any less than $260K, if it still needs a little work in order to rent out. I really think you could count on an SFR beginning to appreciate in the next few years but not necessarily a condo.

I would also think you would have less vacancies with an SFR (all depending on where it was located, of course). Also, I’d like to add that the “People’s Ordinance” in the City of SD does NOT APPLY to condo complexes, ONLY SFR’s.

If jimmyle can’t qualify to purchase an SFR, my points are moot.

jimmyle, have you checked to make sure the condo doesn’t still have polybutylene plumbing between the walls? It’s a disaster waiting to happen (or has already exploded) and was prevalent between 1979 and 1989 build-dates. If there is some of this still left in the building, I wouldn’t touch it. That’s just me. FYI, many owners who got their class-action settlements in 1994 for faulty PTB DID NOT spend this $$ on plumbing upgrades. I wholeheartedly recommend you check into this before making an offer.

Exc. advice Temeculaguy, but I’m concerned about the high HOA fee if there isn’t any amenities for this $$ such as pool/jacuzzi/gym.

Trash for an SFR (if you only allow the smallest – 39 gal. receptable) is about $13 mo. for weekly p/u. (wrapped into prop. tax “People’s Ordinance” in the City of SD where RB is located); water (if no lawn) can be as low as $25 mo.; fire ins. with $1000 ded. for a “replacement value” policy on a $140K condo can be as low as $32 per mo.; sewer as low as $17 mo.; Landscaping svc. as low as $60 per mo.; That adds up to $147 mo. for a 2br/1ba (most likely 1 ba) older-home rental – maybe $170-175 if there is a “postage-stamp” lawn that needs watering plus added fire ins. for an SFR. I would also be concerned here about future HOA hikes as well as special assessments.

However, I don’t see a 2 br/1ba house costing any less than $260K, if it still needs a little work in order to rent out. I really think you could count on an SFR beginning to appreciate in the next few years but not necessarily a condo.

I would also think you would have less vacancies with an SFR (all depending on where it was located, of course). Also, I’d like to add that the “People’s Ordinance” in the City of SD does NOT APPLY to condo complexes, ONLY SFR’s.

If jimmyle can’t qualify to purchase an SFR, my points are moot.

jimmyle, have you checked to make sure the condo doesn’t still have polybutylene plumbing between the walls? It’s a disaster waiting to happen (or has already exploded) and was prevalent between 1979 and 1989 build-dates. If there is some of this still left in the building, I wouldn’t touch it. That’s just me. FYI, many owners who got their class-action settlements in 1994 for faulty PTB DID NOT spend this $$ on plumbing upgrades. I wholeheartedly recommend you check into this before making an offer.