- This topic has 12 replies, 6 voices, and was last updated 4 years, 5 months ago by
sdrealtor.
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July 2, 2020 at 7:23 AM #22940July 2, 2020 at 7:51 AM #818612
CoronitaParticipanthttps://www.neighborhoodscout.com/ca/lemon-grove/crime
I’m sure some people would say it’s fine. I think I would pass. I don’t think I would want to try to get 8% returns if it also significantly increases my chances of getting shot.
July 2, 2020 at 11:03 AM #818617gzz
ParticipantYour cash flow will be better, but LG is downscale but too remote to be gentrified. El Cajon has a better location on the 8 if you want to go downscale rental. (El Cajon also has wealthy areas.)
Someone I know who lived in LG did not like it, and said they we’re moving to next door Spring Valley as soon as they saved up enough for a down payment. While SV and LG kind of blur together for most San Diego residents, they said SV was far nicer.
Despite these issues, if you see what looks like a great opportunity and have a chance to vet it, I’d say go for it.
July 2, 2020 at 4:42 PM #818631Ready2Invest
ParticipantI’m quite surprised by that comment, as I admit I am not familiar with LG at all, and have only visited a handful of times to the restaurants and stores near their downtown area and it seemed actually kind of quaint.
Thanks Gzz for the SV recommendation – will look over there as well.
July 3, 2020 at 11:42 AM #818636CoronitaParticipantIt’s a rougher neighborhood. The tenant quality probably won’t be great and it will probably take more work to find better tenants. That said, if that doesn’t bother you, it could work out. It just might be a lot more work for someone just starting out.
July 5, 2020 at 1:17 PM #818649
svelteParticipantWhen my father owned rentals, he came to the conclusion it was more desirable to have a few higher end rentals than many low end rentals for a variety of reasons that basically boiled down to the quality of tenants.
People who are struggling to make ends meet are far more likely to leave you holding the bag and more apt to do more damage to the property. There were a few horror stories at my dad’s lower end rentals and I can still see the damage when I close my eyes. It was disgusting.
July 5, 2020 at 2:35 PM #818650CoronitaParticipant[quote=svelte]When my father owned rentals, he came to the conclusion it was more desirable to have a few higher end rentals than many low end rentals for a variety of reasons that basically boiled down to the quality of tenants.
People who are struggling to make ends meet are far more likely to leave you holding the bag and more apt to do more damage to the property. There were a few horror stories at my dad’s lower end rentals and I can still see the damage when I close my eyes. It was disgusting.[/quote]
I haven’t yet experienced a malicious tenant (knock on wood). But what particularly concerns me is all these moratoriums and all these movements to do a rental strike. On one hand, I can understand that there on a lot of people who are barely surviving and unable to pay for basic food and shelter. On the other hand, it’s unreasonable to expect the landlords to fix this issue. And seeing where the winds are blowing these days, I really want to try to stay in the higher tenant pools if I can. It’s still not a guarantee things will go well, but the way I look at it is that it increases the odds.
But to see what sort of tenants you possibly might get, I would try to list a fake for rent on Craigslist with as close to the real property stats as possible…. based on the response rate and the quality of the responses (or lack there of) it could provide a valuable preview of what to expect in that submarket.
One thing to keep in mind, I don’t think the entire San Diego rental market is at risk. We have a pretty diverse industry when it comes to industry and employment center, so that while parts will probably suffer, I don’t think it will be catastrophic. Other places like Orlando or Las Vegas that count significantly on leisure/ entertainment, that could a be a major problem. Personally, I wouldn’t want to venture into those geographies just yet. But that’s just me.
This isn’t criticism for those that want to try to get things to work in these higher risk areas, as the rewards could be much larger. It’s just for me, it’s not worth taking the extra risk.
July 5, 2020 at 3:05 PM #818652sdrealtor
ParticipantFrom my perspective areas like LG and to an even great degree Orlando or Vegas are best to invest in for appreciation rather than cash flow and then exchange into a better rental market. In a recession or down market those areas tend to get hit hardest so the bouce back is greatest. Its best to invest in 3rd and 4th tier markets like Vegas near the bottom and trade into higher tiers when they recover.
Buying as an investor in LG or Orlando or Vegas was best between 09 and 011. The time to get out was in 18 and 19. By then prices had fully or nearly recovered and you could trade into a market with a higher quality tenant pool. A good example would be to buy in El Cajon or Lemon Grove at the bottom and enjoy the bigger appreciation for a few years. Then trade up into North Park or Mira Mesa. While its still an option the smart money did a year or two ago.
July 21, 2020 at 1:39 AM #818860ParticipantThank you SDR – wish I had the $ 2-3 years ago.
July 21, 2020 at 3:33 PM #818874ParticipantI didn’t think late 2017 was a great time to buy a condo, after all the crazy appreciation of 2011-2015 was past, and there was no longer immediate large cashflows from rent > mortgage/tax/hoa/insurance.
As it turned out, my ~$70,000 downpayment and ~$20,000 in renovations has morphed into $350,000 in equity.
Main reason I pulled the trigger was the listing was a little below market at a place I had walked by and admired many times. I easily could have missed out on a continuing windfall!
July 22, 2020 at 12:20 AM #818880temeculaguy
ParticipantFor the long term, this is a good guide, page 19 is all you need to see. It shows trends as well, the 5 year trend is especially important, only one city trending in the wrong direction, LG.
https://www.sandag.org/uploads/publicationid/publicationid_4669_27472.pdf
LG has the highest overall crime rate and the highest violent crime rate of any city in the county. Investments are bets essentially. Betting on the worst team in any sport can pay off but the odds are against you.
plus there’s this
It’s not very in depth, the reader has some more research but it looks like the city will go bankrupt. But then again, the Cleveland Browns could win the Superbowl next year, of course I wouldn’t bet my money on that happening, but some will place that bet. Caveat Emptor.
July 22, 2020 at 5:59 AM #818882svelteParticipant[quote=temeculaguy]
plus there’s this[/quote]
The city has been considering disincorporation for awhile now:
July 22, 2020 at 11:25 AM #818887ParticipantAnd a TG sighting! Welcome back old timer. This place gets better every day
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