[quote=sdrealtor]Truth is I find rental prices do not vary all that much throughout SD County. I see $1 to $1.25/sq ft most places.
I guess there’s a big ownership premium up here cause Everyone Wants to Live Here;)[/quote]
That was what I was trying to figure out, because a landlord shouldn’t pay a premium, it’s illogical to invest in an area with a high rent multiplier, only people who lived in a house, moved up and became landlords by circumstance with low tax rates make it pencil out. Even still, CAR’s landlord would be better served selling and buying two properties elsewhere and bringing in more total rent and based on the last cycle, more percentage appreciation down the line. I was trying to figure investor support but it will never really be an issue there, those interested in living there will pay a premium before it get to a price where a newcomer investor gets it to pencil out as a rental for the purpose of being a rental.
I feel like I’m on mars sometimes when I see the math from NCC, I was paying $1500 rent for 1600 sq ft that my landlord paid 360k for, when it got to the point that I could buy it for about 140k yet still couldn’t find a model match for less rent, I started to raise the white flag and went shopping. The 3000+ sq fters had a higher rent multiplier (probably 2k rent for a 300k house that had been 600k) because they aren’t the best rentals for math purposes but they were going for the same price per sq ft, so all seemed right with the world and i thought the sanity would spread to everyone eventually, maybe not the same numbers but the same multipliers.
The logical part of my brain says that there shouldn’t be a sustained ownership premium in an area, that the market forces will either raise rents or lower prices, it’s supply and demand, if it costs twice as much to buy vs rent, less will buy, if the demand is there, more will rent and that will go up, if prices decline, renters will buy, but the two numbers have to find common ground eventually. They have been converging but still are unique in their refusal to find common ground. It boggles the mind, maybe that’s why I throw my hands up and just say “thomas brothers” after reading the various posts.
