Home › Forums › Closed Forums › Buying and Selling RE › Another I want to buy a condo, then rent it out thread.
- This topic has 45 replies, 4 voices, and was last updated 13 years, 6 months ago by
saiine.
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February 23, 2011 at 12:10 PM #18563February 23, 2011 at 12:54 PM #670157
SD Realtor
ParticipantJust do all of your homework with regards to the numbers you use. Also for safety I would depreciate CL rent numbers by 5-10%. What someone asks for on CL and what they get in reality is much different. I would also add in a few weeks per year for vacancy. Also budget a little bit for repairs and such.
As sdr said in another post there are rental opportunities but you have to be patient and look for deals. He mentioned 1 bedrooms. As an anecdote I bought a 1 bedroom in Mission Valley as a rental in 2003 and held it until 2007. I was cash flow nuetral on it +/- 1/2 percent per year. I bought it for like 152 I think and sold for 200k. Could have sold it for much much more if I would have let it go at the peak. However I was blessed with 1 tenant. Had it rented the week after I bought it and that same tenant ended up buying the home. So that was not a cash flow play but a rather fair appreciation play. Also it helped on my taxes each year because of depreciation. I had other stock losses that were used to offset the cap gains on the home so that was nice as well.
With the amount of financing you are throwing down, it will be challenging to get cash flow opportunities no matter what you buy. Personally if something was cash flowing less then 1% for San Diego RE I would not do it but that is just me. If the appreciation is stellar maybe… but the numbers up there you threw out do not make any sense. Also you need a spread sheet that has all of the costs including HOA and other things I mentioned.
February 23, 2011 at 12:54 PM #670828SD Realtor
ParticipantJust do all of your homework with regards to the numbers you use. Also for safety I would depreciate CL rent numbers by 5-10%. What someone asks for on CL and what they get in reality is much different. I would also add in a few weeks per year for vacancy. Also budget a little bit for repairs and such.
As sdr said in another post there are rental opportunities but you have to be patient and look for deals. He mentioned 1 bedrooms. As an anecdote I bought a 1 bedroom in Mission Valley as a rental in 2003 and held it until 2007. I was cash flow nuetral on it +/- 1/2 percent per year. I bought it for like 152 I think and sold for 200k. Could have sold it for much much more if I would have let it go at the peak. However I was blessed with 1 tenant. Had it rented the week after I bought it and that same tenant ended up buying the home. So that was not a cash flow play but a rather fair appreciation play. Also it helped on my taxes each year because of depreciation. I had other stock losses that were used to offset the cap gains on the home so that was nice as well.
With the amount of financing you are throwing down, it will be challenging to get cash flow opportunities no matter what you buy. Personally if something was cash flowing less then 1% for San Diego RE I would not do it but that is just me. If the appreciation is stellar maybe… but the numbers up there you threw out do not make any sense. Also you need a spread sheet that has all of the costs including HOA and other things I mentioned.
February 23, 2011 at 12:54 PM #670967SD Realtor
ParticipantJust do all of your homework with regards to the numbers you use. Also for safety I would depreciate CL rent numbers by 5-10%. What someone asks for on CL and what they get in reality is much different. I would also add in a few weeks per year for vacancy. Also budget a little bit for repairs and such.
As sdr said in another post there are rental opportunities but you have to be patient and look for deals. He mentioned 1 bedrooms. As an anecdote I bought a 1 bedroom in Mission Valley as a rental in 2003 and held it until 2007. I was cash flow nuetral on it +/- 1/2 percent per year. I bought it for like 152 I think and sold for 200k. Could have sold it for much much more if I would have let it go at the peak. However I was blessed with 1 tenant. Had it rented the week after I bought it and that same tenant ended up buying the home. So that was not a cash flow play but a rather fair appreciation play. Also it helped on my taxes each year because of depreciation. I had other stock losses that were used to offset the cap gains on the home so that was nice as well.
With the amount of financing you are throwing down, it will be challenging to get cash flow opportunities no matter what you buy. Personally if something was cash flowing less then 1% for San Diego RE I would not do it but that is just me. If the appreciation is stellar maybe… but the numbers up there you threw out do not make any sense. Also you need a spread sheet that has all of the costs including HOA and other things I mentioned.
February 23, 2011 at 12:54 PM #671311SD Realtor
ParticipantJust do all of your homework with regards to the numbers you use. Also for safety I would depreciate CL rent numbers by 5-10%. What someone asks for on CL and what they get in reality is much different. I would also add in a few weeks per year for vacancy. Also budget a little bit for repairs and such.
As sdr said in another post there are rental opportunities but you have to be patient and look for deals. He mentioned 1 bedrooms. As an anecdote I bought a 1 bedroom in Mission Valley as a rental in 2003 and held it until 2007. I was cash flow nuetral on it +/- 1/2 percent per year. I bought it for like 152 I think and sold for 200k. Could have sold it for much much more if I would have let it go at the peak. However I was blessed with 1 tenant. Had it rented the week after I bought it and that same tenant ended up buying the home. So that was not a cash flow play but a rather fair appreciation play. Also it helped on my taxes each year because of depreciation. I had other stock losses that were used to offset the cap gains on the home so that was nice as well.
With the amount of financing you are throwing down, it will be challenging to get cash flow opportunities no matter what you buy. Personally if something was cash flowing less then 1% for San Diego RE I would not do it but that is just me. If the appreciation is stellar maybe… but the numbers up there you threw out do not make any sense. Also you need a spread sheet that has all of the costs including HOA and other things I mentioned.
February 23, 2011 at 12:54 PM #670219SD Realtor
ParticipantJust do all of your homework with regards to the numbers you use. Also for safety I would depreciate CL rent numbers by 5-10%. What someone asks for on CL and what they get in reality is much different. I would also add in a few weeks per year for vacancy. Also budget a little bit for repairs and such.
As sdr said in another post there are rental opportunities but you have to be patient and look for deals. He mentioned 1 bedrooms. As an anecdote I bought a 1 bedroom in Mission Valley as a rental in 2003 and held it until 2007. I was cash flow nuetral on it +/- 1/2 percent per year. I bought it for like 152 I think and sold for 200k. Could have sold it for much much more if I would have let it go at the peak. However I was blessed with 1 tenant. Had it rented the week after I bought it and that same tenant ended up buying the home. So that was not a cash flow play but a rather fair appreciation play. Also it helped on my taxes each year because of depreciation. I had other stock losses that were used to offset the cap gains on the home so that was nice as well.
With the amount of financing you are throwing down, it will be challenging to get cash flow opportunities no matter what you buy. Personally if something was cash flowing less then 1% for San Diego RE I would not do it but that is just me. If the appreciation is stellar maybe… but the numbers up there you threw out do not make any sense. Also you need a spread sheet that has all of the costs including HOA and other things I mentioned.
February 23, 2011 at 1:13 PM #670234sdrealtor
ParticipantFWIW the rents in PQ look a little light. I would think 2BR would be clsoer to 1400 and 3BR would be at least 1600.
February 23, 2011 at 1:13 PM #670843sdrealtor
ParticipantFWIW the rents in PQ look a little light. I would think 2BR would be clsoer to 1400 and 3BR would be at least 1600.
February 23, 2011 at 1:13 PM #670172sdrealtor
ParticipantFWIW the rents in PQ look a little light. I would think 2BR would be clsoer to 1400 and 3BR would be at least 1600.
February 23, 2011 at 1:13 PM #670982sdrealtor
ParticipantFWIW the rents in PQ look a little light. I would think 2BR would be clsoer to 1400 and 3BR would be at least 1600.
February 23, 2011 at 1:13 PM #671326sdrealtor
ParticipantFWIW the rents in PQ look a little light. I would think 2BR would be clsoer to 1400 and 3BR would be at least 1600.
February 23, 2011 at 1:19 PM #670853saiine
ParticipantThanks SDR. When you said “numbers I use”, what do you mean exactly? I actually have started a spreadsheet, factoring in not only finances, but self scores on things such as parking, walking, area, etc. These are definite contributors to my decision because as I said, I need to live there for several years.
Come day 1, I would like to get a renter in one of the bedrooms to help pay towards the mortgage.
Good point about repairs and vacancy. When you said the numbers didn’t make sense what did you mean exactly? This is what I want to hear, as it will help me get better at this.
February 23, 2011 at 1:19 PM #670182saiine
ParticipantThanks SDR. When you said “numbers I use”, what do you mean exactly? I actually have started a spreadsheet, factoring in not only finances, but self scores on things such as parking, walking, area, etc. These are definite contributors to my decision because as I said, I need to live there for several years.
Come day 1, I would like to get a renter in one of the bedrooms to help pay towards the mortgage.
Good point about repairs and vacancy. When you said the numbers didn’t make sense what did you mean exactly? This is what I want to hear, as it will help me get better at this.
February 23, 2011 at 1:19 PM #670992saiine
ParticipantThanks SDR. When you said “numbers I use”, what do you mean exactly? I actually have started a spreadsheet, factoring in not only finances, but self scores on things such as parking, walking, area, etc. These are definite contributors to my decision because as I said, I need to live there for several years.
Come day 1, I would like to get a renter in one of the bedrooms to help pay towards the mortgage.
Good point about repairs and vacancy. When you said the numbers didn’t make sense what did you mean exactly? This is what I want to hear, as it will help me get better at this.
February 23, 2011 at 1:19 PM #671336saiine
ParticipantThanks SDR. When you said “numbers I use”, what do you mean exactly? I actually have started a spreadsheet, factoring in not only finances, but self scores on things such as parking, walking, area, etc. These are definite contributors to my decision because as I said, I need to live there for several years.
Come day 1, I would like to get a renter in one of the bedrooms to help pay towards the mortgage.
Good point about repairs and vacancy. When you said the numbers didn’t make sense what did you mean exactly? This is what I want to hear, as it will help me get better at this.
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