I want to make sure I can rent out the place in case I cannot sell it (especially if the value of the condo goes down further).
You can always rent something out…It depends on the price…
I use to live at Crest at Del Mar…Good floor plan and units though. The don’t cash flow very well as rental at today’s prices…And given that you probably are going to relocate, imho would be a bad idea to purchase for your purpose of being an “investment property”…
Here’s why.
Assuming you can get a 2/2 at crest for $380k (which is very unlikely imho), and assuming you put 20% down you can get 30 years loan @ 4% (which is also going to be stretch for a condo), you’re looking at a downpayment of 76k and a loan of $304k, which will be about $1451/month.
Then you are looking at $300/month for HOA (roughly)
And the about $4800/year on property tax or $396/month.
So your monthly cost will be about $2147/month…
You *might* be able rent out this 2/2 for about $2300/month. (That’s kinda pushing it…Because I see 3/2 at Pell place or the likes for around $2350-2400/month…But then again, Crest you have your own garage and generally the floor plan is better.)
So you’re looking maybe at +$150/month…
But your $76k is doing nothing….Your $150/month translates into about a a 2.3% return each year on your $76k, and imho that’s a best case scenario….
What are your risks? A lot…
a)If you can’t find a tenant for one month, you lose $2147/month… it basically wipes out 1 year* of your rental income.
b)Something is going to break (at least 1 time per year) that costs more than $150/month
c) It’s can happen (although in this complex probably not likely) your HOA will go up at some point.
d)Once you relocate out of the area, you’re most likely going to need a property manager to help you rent and maintain…they will charge anywhere from $100/month or 5-8%….
You are very likely going to be running negative.Big risk for very little return…..Sorry, but you can probably find a stable dividend mutual fund/bond fund/or that pays you 2.3% with considerably less risk.
And I wouldn’t count on appreciation of these townhomes to happen anytime soon… Condo/townhomes imho are probably the slowest and last to appreciate.
If you could get a 2/2 at Crest for $300kish, then that would be interesting…But then Im sure folks would be all over it (including possibly me).