Downtown Project Going Rental

[PerryChase]

Since I’m now the real estate “expect” in the family, my brother asked me to help him look for a rental.

Here’s a project Downtown going rental. Why buy when you can rent new from the developer?

http://sandiego.craigslist.org/apa/232745153.html

http://www.sdlofts.com/

 

[blahblahblah]

I think you’re going to see a lot more condo projects offering rental options in 2007 and 2008. What’s most interesting is that those 2 projects are really nice compared to most of the cement box high rises. The rents look reasonable, too. I notice they didn’t include any of the local wildlife (crackheads, schizophrenics, winos, etc…) in their architectural drawings.

[(former)FormerSanDiegan]

Is this called a “condo inversion” ?

[lindismith]

cute! (inversion!)

I think we’re going to see more and more and more of this. On one hand it means more places to live for us renters, but what does it mean to the selling market?

[davelj]

Are you sure these were originally going to be marketed as condos? It appears that they were built with the intention of being apartments, but I could be wrong.

[4plexowner]

Anyone who thinks rents in San Diego will rise needs to factor several thousand rental condos into their analysis.

Prices are set at the margin and a glut of rental condos downtown is going to supress rents throughout San Diego.

Single family houses sitting on their own lots may be a different story but I wouldn’t invest my money on that assumption.

[PerryChase]

I agree with you 4plexowner.
Here’s a link to a great house at Aviara in Carlsbad for $2100. Why would anyone want to buy and pay more than double to buy? It’s too far north for my brother and his girlfriend but it’s a good deal.

Owner bought for $432,500 on 3/27/2002. For that purchase price, they aren’t cash flow positive.

http://sandiego.craigslist.org/apa/235378823.html

$2100 / 3br – 3/2.5 Detached Home in Gated Community!
Reply to: [email protected]
Date: 2006-11-15, 2:19PM PST

Lovely executive 3 bedroom, 2.5 home in the gated community of Marea in Aviara, Carlsbad. 1705 square feet, small enclosed backyard. Amazing community pool and spa with ocean views! Brand new neutral paint and carpet throughout! Two car garage. Close to beach, shopping, Four Seasons Resort, and more. Beautiful inside and out.

One year lease required. $2100 deposit and credit check required.

Available now!

7065 Surfbird at Blackrail

[PerryChase]

My experience it that especially with RE, patience is well rewarded. Don’t ever buy or rent out of frustration if you’re not finding the right deal. Something better is always around the corner.

[LookoutBelow]

I totally agree with PerryChase

[powayseller]

I thought rents are going up.

[sdcellar]

Well, you’ve said that several times and it’s been countered with the opinion that they’re not, but I’d have to say most of it’s anecdotal (with my opinion being they’re not going up, at least not significantly).

The only anecdote I’d say that doesn’t count are the rental examples where some home debtor is trying to pass along his exhorbitant mortgage. I’ve seen several of these listings, but they linger and linger, so no, most people don’t seem willing to pay for someone elses mortgage mistake.

Oh, and I totally agree with Perry Chase as well.

[4plexowner]

The threads that I’ve noticed recently where people have talked about rent increases all mentioned increases under 10% in the last year.

Since true inflation is running at 9-10% (at least) these increases are just keeping up with inflation.

One person mentioned a 25% increase when his lease came up for renewal. Accepting such an increase would be less than intelligent IMO – the landlord is just trying to stop or reduce his negative cashflow and if his tenant accepts the increase he wins – more likely is that his tenant moves out and the rental unit lingers on the market as sdcellar is saying.

A landlord walks a fine line when trying to raise rents. Most tenants will accept a small increase because of the hassle of moving but there is a threshold where the rent increase will cause the tenant to move. In my experience, ANY increase in rent causes friction between landlord and tenant since most tenants assume that the landlord is already getting rich at the tenant’s expense. I never increased rents in my units unless the tenant did something to piss me off – at that point, it didn’t matter to me whether they moved or not because they had demonstrated that they weren’t good tenants.

[PerryChase]

Here’s what I discovered looking for rental for my brother on Craigslist.

$5,000+ will rent you the best million-dollar houses in San Diego, RSF, La Jolla, Del Mar, etc… Notice that $5,000/month barely buys you a typical tract house at $700k in suburbia.

As you move down on rental price to about $2000-$3500 you get the typical tract houses around San Diego. Some are reasonable at $2,100 like the example I posted above, many others are abolutely ridiculous meaning that the owners want the tenants to succor them. Some people want $4000 for a plain tract house. I don’t know what they are smoking but they should smoke more of it because the wait will be long.

Anything below $2,000 is not great but I’m sure that with patience you can find a nice place. The key is not to need a place right away.

My feeling is that, with patience, you can get a nice house for $2100-$2500. A great bargain when compared to buying.

I think that my brother will be fine since, as much as I hate it, he and his girlfriend could live with me for a while until they find a good place. Bro recently separated and wifey got the house. He’s pretty cute so he found a hot young thing to ease his pain really quick, ha.ha… There’s a price to be paid for that also 😉

Also, I think that Downtown will become Rental Central once the owners realize there’s little chance of selling and recouping their investments. That might actually bring more people into Downtown and improve its liveliness and habitability.

BTW, it’s kinda fun to cross-reference Craigslist with ZipRealty and SDlookup. Many rentals are also listed for sale. Some rentals are clearly underwater.

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