[quote=wannbelord]Thank you flu and AN for your suggestions and insight. As an investment property what is the benefit of going with a townhouse against an SFR? Will the rental market for SFR is limited as against a townhouse?[/quote]
For me, it wouldn’t matter as long as which one fits my budget and pencils out.. I’m not going to live there, so I don’t care….
For a condo/townhome, you have hoa costs to deal with. And you have to see if and how much the hoa management is underfunded/if any…One of my condos was dirt cheap. But one of the caveats was there was so many foreclosures/short sales in that unit, that the HOA was underfunded. So knowingly, the HOA cost was increased from $289/month to roughly $400/month for the next 5 years as sort of a special assessment…It still pencils out, but just something you need to be aware of…
For SFH, you have much more maintenance/insurance costs to deal with, IE like everything ….
SFH historically appreciated better than condos/townhomes…
Just look at the numbers to see if either fit..or not..
There’s other pigglords here that are much more seasoned than me, so maybe they can weigh in… I’m really relatively new to this, and (knock on wood) condos have worked out for me simply because they fit my budget, and I wanted more property versus having one with most of my money in it…The only SFH I have isn’t here, and it was mainly out of luck of being my primary residence first versus being an actual rental property that I actively bought for that purpose..
Typically, though, I don’t think a SFH CarmelV or Irvine would fit your budget you mentioned above…And unless you are actually planning to live in one of those homes and first build equity a few years by living there, SFH also don’t pencil out very well either as rental income…
Places like CarmelV and Irvine probably are more of an appreciation play than an rental income generation play, and one probably ends up trying to break even on renting it out while hoping appreciation will continue into the future….
You probably need to spend some time actively looking…Some of us have never stopped looking over the years. And with that, sometimes it means waiting and waiting and waiting..(Some of us waited too long too and saw opportunity fly right by, including me)….It’s not generally something one can wake up in the morning and decide they want to buy a rental property and be done with it by the next morning….Don’t let this be discouragement, because imho you should always be looking.. But, just be realistic that it’s probably not something that is going to be quick, especially right now..
Subscribe to things like redfin and get a regular update on properties available, and that will get you tuned into what the resale market is currently doing. And if you need to figure out how much rent is to see if it will cash flow at the level you want, look on craigslist… or if you really want to be sure, do what some people do while they are in escrow and make a fake “for rent” posts in craiglist to test how much rent you can fetch for a given location..If you end up getting 5 responses over 3-4 days, then I think the rent price is pretty close to market…If you get 8+ responses in less than 24 hrs, than it means you set the rent price lower than market price…
