I have spent quite a bit of time researching investment income properties and have started building a portfolio. The first thing to look at is the return on investment (ROI) sometimes expressed as the Capitalization (cap) Rate. After looking at many places in CA, it became clear that better opportunities exist elsewhere. The next major hurdle is property management, which is as important as the property itself. As a rule of thumb you will want a rent of $1,000 for a $100k home in order to cash flow, as you can expect to pay up to 50% of gross rent on costs. Your competition is an army of cash buyer baby boomers out there hunting down alternative fixed incomes streams. Spend six months to a year researching before you do anything. CA will be a challenge.
