mephisto estimated low-end rent at $1300, which is consistent with today’s rental market for properties in the 300K range.
Rent at 1458 in 5 years would represent a total increase of about 12% (2.4% per year), which is feasible but probably on the low end.
If we see inflation at 2.4% per year, then that rent growth is reasonable. HOWEVER, if inflation is at 2.4% then bonds and cash flow investments would likely be in the 5% range. If the property value fell in half as you suggest, the cash-on-cash return for this property would be 10% minus expenses. That seems awfully high in a 5% world. In that scenario, I see more like a value of around 230K (13.3x annual rent instead of the 10x you used for equivalent yield of 7.5%)
How much have median household incomes risen in San Diego in the last 5-6 years. I saw in another post (by DrHousingBubble under the “UCLA Anderson Forecast” thread) That level of income gain (~6%) per year would support more significant rise in rents.
