[quote=livinincali]I can think of a scenario where this type of situation would apply here in San Diego. Suppose for a moment you gobbled up 3-4 cash flowing rental properties in a place like Mira Mesa and rented them out to young Qualcomm engineers or some people that were in related fields. Suppose then that mobile slows down and Qualcomm decides to layoff 5K people. 2 or 3 of your tenants get laid off and decide to leave your properties. Now you went from you nice 5% cap and the $500/month to a negative $2000/month situation. How long can you handle that situation and how long will it take you to find new tenants?[/quote]Rent in Mira Mesa only went up about $100-200 for a 1/1 and 2/2 over the last 15 years. QCOM was much smaller than than it is today. So, I don’t see rent in MM dropping $700/month anytime soon. If rent drop $700/month, then you’re talking about a 2/2 rent @ $800 and a 1/1 rent @500/month. I don’t see that ever happening. Rent for a 2/2 in MM hasn’t been that cheap for 20 years. At that time, QCOM was still in a startup mode and a lot of the QCOM buildings today were just empty land and UTC area was pretty empty compare to how it is today. If we do see that kind of rent drop, then there are much much worse thing to worry about. After all, rent was flat between 2005-2010, during the whole financial crisis.
