I purchased a condo in OB a bit less than a year ago.
My down payment + renovation expense (including carry costs when it was vacant) was about $100,000.
At this point, I think it is worth about $130,000 more than I paid for it. So my cash-on-cash return is more than 100% in one year.
Some of this large return is me getting lucky on a below-market condo in ugly but easy to fix condition. And I am not including the value of my labor. Still, I could have purchased just about any condo in San Diego last year and had a return of at least 50% and quite likely 100%.
I ended up renting it to someone I like about 5% below market (now about 10% below market), but even this low rent is about 3k more per year than mortgage/tax/HOA, so the free cash flow return is 3%.
But if you include the part of my monthly cost that goes to principal, then the return on rent without even factoring in appreciation is more like 8%.
In summary, San Diego real estate is an excellent investment, even if you assume 0% appreciation in prices. And of course we will go up more than 0% a year.
