svelte, I agree with your analogy about the quality of renters a particular property attracts. IMO, LOCATION and FAIR RENT is EVERYTHING here. The key to landlording is to ATTRACT and KEEP LONG-TERM tenants. IMO, this is far MORE IMPORTANT than being able to frequently raise the rent.
My former rentals were in SE San Diego. I cleaned up after SO MANY TENANTS (sometimes on holiday weekends and one time while nearly 9 mos. pregnant) and the work we had to do to ready the property for rent was typically FAR MORE than their deposit provided for. (A deposit equal to one mos. rent was all we could collect.) I won *12* small claims judgments for the balance of damages but was only able to collect on two of them. I had to replace the front door frame four times, the LR window once and the screens many times, due to damage from break ins. Eventually, we just installed wrought iron.
At the time of purchase, the neighborhood was fine, but between ’84 and ’86 went severely downhill due to PCP being sold openly down the street and the main drag turned into a race course for drunks. Eventually, all the local phone booths were stripped due to illegal activity being conducted from them. The police frequently used the field across the street for their helicopter “launching pad.”
Even though (conveniently) 5 mins. from NAVSTA (32nd St.), it got to a point where we couldn’t keep tenants even for the duration of their six-month lease. Two moved out in the middle of the night. Now, this ‘hood is somewhat “cleaned up” but IMO still not a good investment today at prices at or less than we paid almost 30 yrs. ago!
I think the best rentals are SFR vacation rentals (NOT TIMESHARES)! I’m looking into purchasing a 1300-1500 SF house in South Lake Tahoe, CA within one block of the free bus line to Heavenly and less than one mile from the south shore of the lake. Yes, I will turn it over to prop. mgmt. except for perhaps 1 week in winter which will be reserved for me and my family to ski. Even if it is sometimes vacant, I expect to make more than enough to pay the annual PITI and maintenance from the year-round day/wk/month rental fees (minus mgmt. fees). Many SFR’s in S. Lake Tahoe are rented day/wk/month. I don’t think this practice is allowed anywhere in SD except perhaps Mission Beach and Carlsbad (OB not anymore??). A vacation rental typically brings in a much higher rent than a regular rental.
At today’s prices, this property will cost me between $175K and $250K and I will put $50K down. In July/August 2014, I will sell here in SD County, retire in my “vacation rental” myself, do some minor remodel work and turn into a ski bum, that is, if my knees hold up – LOL! My kids have already and will leave SD County upon HS graduation as they have tasted other places they like better (other parts of Cal).
