[quote=gzz]I agree that hold and wait will probably work well. I have about 870k in low interest mortgage debt on them, and if the value of the property grows 4% a year with the leverage the 870k in equity grows about $70,000 a year for an 8% annual return plus the small profit from renting themselves over the mortgage/maintenance brings that up to almost 10%.
I’ve been giving some thought of moving to SF since about half of my work is there, that’s the main reason I might sell, otherwise I could not afford to buy there. Hard to really say for sure, but the return on real estate might end up being higher there too. The problem is there already has been much more appreciation there than here. SD and SF both had rapid appreciation 2011 to 2013, but we slowed down after that and SF did not.
If I moved there I’d probably get something like these:
WOW, lucky you, gzz! I didn’t realize there were still fairly reasonable deals out there for SF. Thanks for sharing! I like the location and fantastic lot size of the 2nd listing better than the 1st one, but the 1st one has a great location as well although not as “upscale” and has a garage (for no bigger than a Prius). That’s HUGE in SF! It appears that the owners/LL of the 1st listing, just north of the Castro, lost it to FC due to ATMing it to death over the years, cuz they had to have purchased it >25 years ago. I’d take the 2/1 right above the garage and the garage for myself and rent the 3rd flr 2/1 out (after slightly rehabbing it) if I bought it. (One of the back [1/1?] unit’s tenant is apparently still under a “rent control” contract.) It has a nice elevated easy-care backyard as well.
I can’t tell from the map, but if the 2nd listing actually has a double-deep lot, it may abut the street behind where you may be able to get ingress/egress from that street and build a 2-car garage.
I’m with flyer. I really believe you can quickly unload your OB (2 on 1?) without even listing it. Although you have 2 detached homes in OB and the homes in SF are attached, I do agree that SF tends to appreciate more and faster and is definitely less transient (once tenants finally score a rental there, they tend to stay, esp if the unit is “rent controlled”). I would think that new tenants (not established, rent-controlled tenants) in SF make far more money, on average, then tenants in OB (SD) and tend to stay longer. That is, unless you can get away with turning your SD houses into AirBnB or VBRO, which is a constant hassle to manage with a FT job. You state City will not allow you to pave your front setback for parking. Do you think they would approve your turning them into VBRO? Of course, your neighbors would likely report you if you started to do that. You also state that you’re currently getting $7K month rent. Wow, that seems like a LOT to me for OB! Are you getting 1 yr+ leases totaling $7K month in rent? OB has always seemed very crowded and transient to me but maybe I’ve been asleep at the switch while it has gentrified beyond recognition :=0
Good luck to you, gzz! If I were you, I’d sell and go to SF in a heartbeat. Life can be short and it is (literally and figuratively) a “breathtaking” place to live and work … the experience of a lifetime!
Edit: I just reread the thread and it appears you bought two contiguous parcels. Your mention of your $870K encumbrance caught me off guard and I thought it was for one property.
