This would be a rare occurrance in today’s San Diego market, so it is either a great find or a really crappy neighborhood.
Rents can indeed fall, but what percent decline would be associated with your $100-500 difference ?

Some details would help address this …, such as
purchase price and monthly rent.

With this little margin, you would still be counting on appreciation. The 100-500 difference is likely to get eaten into by maintenance costs. $100 per month is not much. One major repair (heater, water heater, A/C, pipe break, dishwasher) per year eats that up. Trust me, I’ve had each of these things happen to me in a property I’ve for 6 years. One per year is standard, plus all the other minor maintenance issues (clogged toilet, skunk removal, paint) and vacancies will take your positive cash flow.

You’ll still likely have the tax benefit associated with depreciation, which might save you a few hundred $ per year in taxes, depending on your situation.

So, you won’t get much cash off this place, all things considered. You’ll still have to depend on appreciation to make money on this deal.

If you get numbers like this in Barrio Logan I would not buy. However, for bread-and-butter areas like Clairemont, when the numbers look like that (a few hundred bucks positive per month) I would buy. We are a long ways from that in the current market.