Not to worry. I’m not really interested in buying rental units in south San Diego. I only mentioned south San Diego because things are further along the way to making sense there from an investment perspective than other parts of the county. Your observation about Mexicans heading back to Mexico makes sense to me, but a friend of mine is seeing something completely different. He’s a partner in a company that owns two large apartment complexes in Chula Vista (more than 400 units between the two of them). They have zero vacancies and are raising rents 8% as new tenants come in. They’re seeing an overflow from people losing their homes and needing to rent. He thinks rents will eventually flatten out as the REOs get sold to investors but that could be a couple of years off. Anyhow, just an interesting data point.
sdrealtor,
25%-35% of rent for maintenance and vacancies is an industry standard. New paint, carpet, etc. plus vacancies really adds up, especially in a rental where then tenant generally doesn’t care too much. I’m not saying that there aren’t properties worth buying right now as rentals. I’m merely saying that I doubt there’s anything that “truly” cash flows out there after taking into account all of the operating expenses. But we’ll get there. There were plenty of them around in ’96-’98. We’ll see similar relative pricing again.
