While I’m not as familiar with the area as TG, my wife and I have been looking for an investment property there for a year or so. What it comes down to is this – in order to attract the most potential tenants, buy something that YOU wouldn’t mind living in. That is, a 2 bedroom apartment conversion without a garage is a definite no-no. Once you buy it, set the rent just below market and don’t settle for a low quality tenant.
We had decided that the sweet spot is a 1400-1700sf condo with attached 2-car garage (if $200/mo HOA seems high, consider what you get for it, like a new roof every so often and no need to pay a gardner). So naturally we ended up opening escrow on a small (2000sf-ish) house, at least I think we have, if the seller signs today. We overpaid for it, but the location is awesome and we’re very happy. We’re going to live there for now, but it was definitely selected as an investment property for ease of renting, and should cash flow about $500/month when we rent it out in 3-4 years.
Here’s a house that conveniently already has tenants: http://www.redfin.com/CA/Temecula/45337-Escalon-St-92592/home/6493363
According to the listing agent, it’s renting for $1,600. I’ll let you do the math and decide if those are the kind of numbers you can live with. It will undoubtedly do better in a few years.
egads, nevermind – $120 HOA. Unacceptable for a sfr rental. I do like the house, though.
Edit#2: In my experience, it’s hard to find a really bad neighborhood in Temecula. I would stay away from areas built in the 80’s (like west of Pechanga Pkwy), they look dated and will only cost you in maintenance. Also think ease of commuting for your tenant. Don’t rule out Murrieta, either.
