[quote=flyer]As someone who has owned investment properties in San Diego and elsewhere for many years, and done very well–mostly because the timing was right–I don’t really think anyone jumping into the market now can predict with complete certainty what their real estate or other investments will yield in 10, 20 or 30 years–I know we never thought we could.
My feeling is–if you are truly in a positive financial position, and want to get into the game at this point in our economic history–do so–but also keep a few “Mil” around for retirement–just in case “life happens.”
In the meantime, my philosophy has always been to live the life you want to live now–today–if at all possible–because you never really know what the future may bring.[/quote]
flyer, if I am understanding your post correctly, I would have to agree with it wholeheartedly. As I stated earlier in this thread, I don’t believe the same success can be had today with becoming a small-scale landlord in CA that one could have had buying investment RE in decades past. This is mostly due to much higher purchase prices today and therefore much higher taxes and carrying costs. Your “cautionary advice” about leaving a few Mil around for retirement (or at least 1 mil, if one is considering trying their hand at landlording) is solid.
I don’t think the financial success of 30+ year LL’s (to the degree they were successful given their actual financial investment) can be repeated today by ~new LL’s … anywhere in CA. They hung in for the long haul, through thick and thin, no matter what happened in their lives. Most of them managed their own rental properties and that is to be commended in my book.
Today’s new LL’s are untested for the long haul …. and frequently have 10x the carrying costs of pre-Prop 13 LL’s. In addition, those “old school” LL’s did most of all of the labor on their rental properties, thus saving themselves many thousands over the years and most of today’s LL’s likely do not.
For these reasons, a rental property in CA would have to be purchased today for a price far under its recent sold comps (likely for all cash) and possibly fixed up by the buyer/prospective LL (mostly DIY) in order to make the investment pan out financially in the long haul. This is due to inevitable unexpected vacancies.
There are a couple of things a new LL can’t predict. Those are future vacancy rates and ongoing desirability of their rental properties to future tenants. These are especially important considerations if they are expecting to buy them with mortgages.
As an aside, I’ve gotten many articles in e-mail over the past couple of years on the subject of distant suburbs and exurbs “dying” or “expected to die” all over the US. I’m not seeing that here but the time may very well come when workers in SD County no longer can or want to commute more than 1/2 hour one way to/from work every day.
Therefore, the best rental properties to buy today may very well be within just a few miles of job centers and on or within 2 blocks of public transportation. These areas may not have the “look or feel” that prospective LL’s who have always lived in *newer* subdivisions are used to but they very possibly might turn out to be the best rental investments.
These are same areas that 65+ yo Joe6p LL has owned rental properties in and consistently rented them out for the past 30+ yrs.
