Buying a small condo in UTC as an investment?

[4plexowner]

“a UCSD staff or postdoc or other fulltime employees would be preferable”

this thing called financial reality has a way of squashing our preferences

my first rental properties were all apartment type units – common walls, etc – then I bought some single family houses and assumed I would be dealing with a higher class of tenants

the houses were nice but the ‘nice young family’ that I preferred as tenants had gone and purchased their own house because, as long as they could fog a mirror, they were able to purchase their own starter home instead of renting mine

so instead of renting to nice small families I ended up renting to room mates and dealing with the related issues

my point is that the nice things we think of while sitting around our kitchen table don’t always work out in reality – as a potential landlord I believe you would be better off thinking about how you will deal with real tenants instead of your ideal ones

what will you do when you realize your tenant has a cat although your lease says no pets? what will you do about the pad under the carpet that is now ruined and smells like cat urine?

what will you do at move-out time when the tenant is leaving you a unit that you will have to spend several hours cleaning?

what will you do on Thanksgiving day when the tenant calls and says the sink is backed up?

what will you do when the tenant gives you some BS about why they can’t pay the rent on time? (“my grandfather died” is the lamest excuse I was given – I didn’t bother asking how this affected their ability to pay rent – just handed them a 3-day pay or quit notice …)

what will you do when the tenant doesn’t pay last month’s rent and tells you to take it out of the security deposit?

what will you do when the unit has been vacant for 5 weeks and there are no good prospective tenants on the horizon?

[Scarlett]

Thank you 4 plex! All very good points 4plex. I am probably too busy and lazy to want to deal with all that, and it will probably fall on me mostly, since my sister doesn’t live in SD.
How about renting through an agency? How much they cost? Anybody has experience with that?

[Scarlett]

Thank you 4 plex! All very good points 4plex. I am probably too busy and lazy to want to deal with all that, and it will probably fall on me mostly, since my sister doesn’t live in SD.
How about renting through an agency? How much they cost? Anybody has experience with that?

[Scarlett]

Thank you 4 plex! All very good points 4plex. I am probably too busy and lazy to want to deal with all that, and it will probably fall on me mostly, since my sister doesn’t live in SD.
How about renting through an agency? How much they cost? Anybody has experience with that?

[Scarlett]

Thank you 4 plex! All very good points 4plex. I am probably too busy and lazy to want to deal with all that, and it will probably fall on me mostly, since my sister doesn’t live in SD.
How about renting through an agency? How much they cost? Anybody has experience with that?

[Scarlett]

Thank you 4 plex! All very good points 4plex. I am probably too busy and lazy to want to deal with all that, and it will probably fall on me mostly, since my sister doesn’t live in SD.
How about renting through an agency? How much they cost? Anybody has experience with that?

[4plexowner]

6-8% of rents for mgmt company – lower % if you turn over more units to them – plan on 8% minimum for a single unit

and don’t think that mgmt companies are a walk in the park either – I turned a property over to a local mgmt company and took the property back less than 2 months later – incompetence and indifference are running rife in our society – it doesn’t matter that you are paying good money for a ‘professional’ service, the mgmt company is very unlikely to do things in a manner that you find acceptable

the parents of one of my friends have owned rental units in San Diego for over 30 years – they have gone back and forth numerous times between managing the units themselves and turning them over to a mgmt company – they are currently doing the mgmt themselves because the last mgmt company screwed them out of about $15K – basically, they balance the pain of managing the units themselves against the pain of letting a mgmt company manage the units – the balance of pain has shifted numerous times over the years

bottom line: owning real estate is a pain in the ass whether it is your own dwelling or a rental – don’t think that buying real estate is the easy road to wealth [caveat: owning real estate has historically been the best way for the little guy to become wealthy so there is a reason to put up with the hassle]

[4plexowner]

6-8% of rents for mgmt company – lower % if you turn over more units to them – plan on 8% minimum for a single unit

and don’t think that mgmt companies are a walk in the park either – I turned a property over to a local mgmt company and took the property back less than 2 months later – incompetence and indifference are running rife in our society – it doesn’t matter that you are paying good money for a ‘professional’ service, the mgmt company is very unlikely to do things in a manner that you find acceptable

the parents of one of my friends have owned rental units in San Diego for over 30 years – they have gone back and forth numerous times between managing the units themselves and turning them over to a mgmt company – they are currently doing the mgmt themselves because the last mgmt company screwed them out of about $15K – basically, they balance the pain of managing the units themselves against the pain of letting a mgmt company manage the units – the balance of pain has shifted numerous times over the years

bottom line: owning real estate is a pain in the ass whether it is your own dwelling or a rental – don’t think that buying real estate is the easy road to wealth [caveat: owning real estate has historically been the best way for the little guy to become wealthy so there is a reason to put up with the hassle]

[4plexowner]

6-8% of rents for mgmt company – lower % if you turn over more units to them – plan on 8% minimum for a single unit

and don’t think that mgmt companies are a walk in the park either – I turned a property over to a local mgmt company and took the property back less than 2 months later – incompetence and indifference are running rife in our society – it doesn’t matter that you are paying good money for a ‘professional’ service, the mgmt company is very unlikely to do things in a manner that you find acceptable

the parents of one of my friends have owned rental units in San Diego for over 30 years – they have gone back and forth numerous times between managing the units themselves and turning them over to a mgmt company – they are currently doing the mgmt themselves because the last mgmt company screwed them out of about $15K – basically, they balance the pain of managing the units themselves against the pain of letting a mgmt company manage the units – the balance of pain has shifted numerous times over the years

bottom line: owning real estate is a pain in the ass whether it is your own dwelling or a rental – don’t think that buying real estate is the easy road to wealth [caveat: owning real estate has historically been the best way for the little guy to become wealthy so there is a reason to put up with the hassle]

[4plexowner]

6-8% of rents for mgmt company – lower % if you turn over more units to them – plan on 8% minimum for a single unit

and don’t think that mgmt companies are a walk in the park either – I turned a property over to a local mgmt company and took the property back less than 2 months later – incompetence and indifference are running rife in our society – it doesn’t matter that you are paying good money for a ‘professional’ service, the mgmt company is very unlikely to do things in a manner that you find acceptable

the parents of one of my friends have owned rental units in San Diego for over 30 years – they have gone back and forth numerous times between managing the units themselves and turning them over to a mgmt company – they are currently doing the mgmt themselves because the last mgmt company screwed them out of about $15K – basically, they balance the pain of managing the units themselves against the pain of letting a mgmt company manage the units – the balance of pain has shifted numerous times over the years

bottom line: owning real estate is a pain in the ass whether it is your own dwelling or a rental – don’t think that buying real estate is the easy road to wealth [caveat: owning real estate has historically been the best way for the little guy to become wealthy so there is a reason to put up with the hassle]

[4plexowner]

6-8% of rents for mgmt company – lower % if you turn over more units to them – plan on 8% minimum for a single unit

and don’t think that mgmt companies are a walk in the park either – I turned a property over to a local mgmt company and took the property back less than 2 months later – incompetence and indifference are running rife in our society – it doesn’t matter that you are paying good money for a ‘professional’ service, the mgmt company is very unlikely to do things in a manner that you find acceptable

the parents of one of my friends have owned rental units in San Diego for over 30 years – they have gone back and forth numerous times between managing the units themselves and turning them over to a mgmt company – they are currently doing the mgmt themselves because the last mgmt company screwed them out of about $15K – basically, they balance the pain of managing the units themselves against the pain of letting a mgmt company manage the units – the balance of pain has shifted numerous times over the years

bottom line: owning real estate is a pain in the ass whether it is your own dwelling or a rental – don’t think that buying real estate is the easy road to wealth [caveat: owning real estate has historically been the best way for the little guy to become wealthy so there is a reason to put up with the hassle]

[2009 Buyer]

Analysis on owning rentals typically do not take into account the opportunity cost asociateds with the down payment – for example

25% on a $400K unit is $100K

assuming a relative safe return of 6%, we are talking about $500 a month cost that I seldom see in the Break Even or cash flow positive calculations. am I missing anything?

[2009 Buyer]

Analysis on owning rentals typically do not take into account the opportunity cost asociateds with the down payment – for example

25% on a $400K unit is $100K

assuming a relative safe return of 6%, we are talking about $500 a month cost that I seldom see in the Break Even or cash flow positive calculations. am I missing anything?

[2009 Buyer]

Analysis on owning rentals typically do not take into account the opportunity cost asociateds with the down payment – for example

25% on a $400K unit is $100K

assuming a relative safe return of 6%, we are talking about $500 a month cost that I seldom see in the Break Even or cash flow positive calculations. am I missing anything?

[2009 Buyer]

Analysis on owning rentals typically do not take into account the opportunity cost asociateds with the down payment – for example

25% on a $400K unit is $100K

assuming a relative safe return of 6%, we are talking about $500 a month cost that I seldom see in the Break Even or cash flow positive calculations. am I missing anything?

[Author]

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