Recommendation: Investment property in Temecula

[Ren]

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.

[Nor-LA-SD-guy]

Personally I find that the higher end you go for rentals the more trouble you will have, as these people are generally not in the life time renter class and have a much different attitude toward renting than someone more inclined to rent for a long period of time. So I would not look at a rental home the same as one you would want to live in, but whatever you are most comfortable with I guess.

As a side note most people get into being landlords by accident (many of these happing now) they are ready to move up and find a deal but at the same time don’t want to sell in today’s market. Not saying this is bad Idea but the same logic may not be the best one for rental property investment in general.

[Nor-LA-SD-guy]

Personally I find that the higher end you go for rentals the more trouble you will have, as these people are generally not in the life time renter class and have a much different attitude toward renting than someone more inclined to rent for a long period of time. So I would not look at a rental home the same as one you would want to live in, but whatever you are most comfortable with I guess.

As a side note most people get into being landlords by accident (many of these happing now) they are ready to move up and find a deal but at the same time don’t want to sell in today’s market. Not saying this is bad Idea but the same logic may not be the best one for rental property investment in general.

[Nor-LA-SD-guy]

Personally I find that the higher end you go for rentals the more trouble you will have, as these people are generally not in the life time renter class and have a much different attitude toward renting than someone more inclined to rent for a long period of time. So I would not look at a rental home the same as one you would want to live in, but whatever you are most comfortable with I guess.

As a side note most people get into being landlords by accident (many of these happing now) they are ready to move up and find a deal but at the same time don’t want to sell in today’s market. Not saying this is bad Idea but the same logic may not be the best one for rental property investment in general.

[Nor-LA-SD-guy]

Personally I find that the higher end you go for rentals the more trouble you will have, as these people are generally not in the life time renter class and have a much different attitude toward renting than someone more inclined to rent for a long period of time. So I would not look at a rental home the same as one you would want to live in, but whatever you are most comfortable with I guess.

As a side note most people get into being landlords by accident (many of these happing now) they are ready to move up and find a deal but at the same time don’t want to sell in today’s market. Not saying this is bad Idea but the same logic may not be the best one for rental property investment in general.

[Nor-LA-SD-guy]

Personally I find that the higher end you go for rentals the more trouble you will have, as these people are generally not in the life time renter class and have a much different attitude toward renting than someone more inclined to rent for a long period of time. So I would not look at a rental home the same as one you would want to live in, but whatever you are most comfortable with I guess.

As a side note most people get into being landlords by accident (many of these happing now) they are ready to move up and find a deal but at the same time don’t want to sell in today’s market. Not saying this is bad Idea but the same logic may not be the best one for rental property investment in general.

[sd_owner]

Thanks to all for the excellent information. I am looking for an investment property which will provide a good return from home price appreciation and/or rental income, with the emphasis on home price appreciation.

Are there any specific neighborhoods that you think would be especially attractive to renters? For example, most renters are single or young couples. If a house is close to an elementary school or conveniently located (for transit or shopping), do you think it will be desirable as a rental?

[sd_owner]

Thanks to all for the excellent information. I am looking for an investment property which will provide a good return from home price appreciation and/or rental income, with the emphasis on home price appreciation.

Are there any specific neighborhoods that you think would be especially attractive to renters? For example, most renters are single or young couples. If a house is close to an elementary school or conveniently located (for transit or shopping), do you think it will be desirable as a rental?

[sd_owner]

Thanks to all for the excellent information. I am looking for an investment property which will provide a good return from home price appreciation and/or rental income, with the emphasis on home price appreciation.

Are there any specific neighborhoods that you think would be especially attractive to renters? For example, most renters are single or young couples. If a house is close to an elementary school or conveniently located (for transit or shopping), do you think it will be desirable as a rental?

[sd_owner]

Thanks to all for the excellent information. I am looking for an investment property which will provide a good return from home price appreciation and/or rental income, with the emphasis on home price appreciation.

Are there any specific neighborhoods that you think would be especially attractive to renters? For example, most renters are single or young couples. If a house is close to an elementary school or conveniently located (for transit or shopping), do you think it will be desirable as a rental?

[sd_owner]

Thanks to all for the excellent information. I am looking for an investment property which will provide a good return from home price appreciation and/or rental income, with the emphasis on home price appreciation.

Are there any specific neighborhoods that you think would be especially attractive to renters? For example, most renters are single or young couples. If a house is close to an elementary school or conveniently located (for transit or shopping), do you think it will be desirable as a rental?

[Ren]

[quote=Nor-LA-SD-guy]Personally I find that the higher end you go for rentals the more trouble you will have, as these people are generally not in the life time renter class and have a much different attitude toward renting than someone more inclined to rent for a long period of time. So I would not look at a rental home the same as one you would want to live in, but whatever you are most comfortable with I guess.
[/quote]

My point is just that you can’t buy an apartment conversion and think someone will say “oh good, an 11’x12′ master bedroom and a carport,” because they won’t. They’ll immediately cross you off the list. There’s a point where it’s large enough that it isn’t a pain in the ass to live in, but not so large that the tenant may as well buy something rather than pay that kind of rent. I definitely wouldn’t go high end on a rental. My 2000sf place is the largest I would consider.

You are far less likely to have trouble with tenants if you do a thorough reference/employment/credit check, and if you price below market, the good tenants (who can be choosy) will tend to gravitate to you.

[Ren]

[quote=Nor-LA-SD-guy]Personally I find that the higher end you go for rentals the more trouble you will have, as these people are generally not in the life time renter class and have a much different attitude toward renting than someone more inclined to rent for a long period of time. So I would not look at a rental home the same as one you would want to live in, but whatever you are most comfortable with I guess.
[/quote]

My point is just that you can’t buy an apartment conversion and think someone will say “oh good, an 11’x12′ master bedroom and a carport,” because they won’t. They’ll immediately cross you off the list. There’s a point where it’s large enough that it isn’t a pain in the ass to live in, but not so large that the tenant may as well buy something rather than pay that kind of rent. I definitely wouldn’t go high end on a rental. My 2000sf place is the largest I would consider.

You are far less likely to have trouble with tenants if you do a thorough reference/employment/credit check, and if you price below market, the good tenants (who can be choosy) will tend to gravitate to you.

[Ren]

[quote=Nor-LA-SD-guy]Personally I find that the higher end you go for rentals the more trouble you will have, as these people are generally not in the life time renter class and have a much different attitude toward renting than someone more inclined to rent for a long period of time. So I would not look at a rental home the same as one you would want to live in, but whatever you are most comfortable with I guess.
[/quote]

My point is just that you can’t buy an apartment conversion and think someone will say “oh good, an 11’x12′ master bedroom and a carport,” because they won’t. They’ll immediately cross you off the list. There’s a point where it’s large enough that it isn’t a pain in the ass to live in, but not so large that the tenant may as well buy something rather than pay that kind of rent. I definitely wouldn’t go high end on a rental. My 2000sf place is the largest I would consider.

You are far less likely to have trouble with tenants if you do a thorough reference/employment/credit check, and if you price below market, the good tenants (who can be choosy) will tend to gravitate to you.

[Ren]

[quote=Nor-LA-SD-guy]Personally I find that the higher end you go for rentals the more trouble you will have, as these people are generally not in the life time renter class and have a much different attitude toward renting than someone more inclined to rent for a long period of time. So I would not look at a rental home the same as one you would want to live in, but whatever you are most comfortable with I guess.
[/quote]

My point is just that you can’t buy an apartment conversion and think someone will say “oh good, an 11’x12′ master bedroom and a carport,” because they won’t. They’ll immediately cross you off the list. There’s a point where it’s large enough that it isn’t a pain in the ass to live in, but not so large that the tenant may as well buy something rather than pay that kind of rent. I definitely wouldn’t go high end on a rental. My 2000sf place is the largest I would consider.

You are far less likely to have trouble with tenants if you do a thorough reference/employment/credit check, and if you price below market, the good tenants (who can be choosy) will tend to gravitate to you.

[Author]

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