AV, as far as “interest rates” correlating to “prevailing rents” in Coastal CA . . . move on, there is no connection here. In Coastal CA, rents are based purely upon desirability of the unit (supply and demand) and whether there is “rent control” in place in the jurisdiction of the rental property.
Many on this board have lamented that the “free and clear” owner who is collecting rent and has low property taxes is “gouging” their tenant(s). These “complainers” fail to take into account that this same owner very likely WAS at one time paying at least a 4% mortgage on the same property over the course of 20+ years whilst collecting $65 to $250 monthly rent for each unit (which was their “rental market” at the time). Do you think they all had a “positive cash flow” back then in light of repairs and vacancies? The truth is, these landlords who paid their properties off long ago are deserving of a “retirement income” today, provided they properly manage their unit(s) or hire someone else to do so.
RE in CA coastal counties isn’t “set up” to be a positive cash flow until the mortgage is retired.
That’s the way it’s always been. If you will be buying an SFR with a mortgage and want positive cash flow NOW, go to FL, TX or possibly still AZ, for starters.
