should I buy in temecula

[carlsbadworker]

[quote=paramount]
Talk to many who live in Temecula, and sooner or later most will say the following: we wanted to move to San Diego or we want to move to San Diego.[/quote]

That’s actually has been the question asked by many board members. Why have you not moved yet?

[quote=paramount]
My total mortgage is ~ $1600/month because I am in fact conservative, and very affordable as a % of my income. My taxes are barely over 1%.
[/quote]

Wait a minute. ~$1600/month is not that small. That is $300K loan at 5%. For a 1500sqft house, that’s too much. That just proves TG’s point that Temecula is bad for those who bought at the bubble years. If you instead only have $200K loan and you are able to refine at today’s approaching 4% 30-year fixed with FED’s help, then that’s only $1K per month. You will be able to close-to cash flow at this price. You can move to San Diego and leave this as a rental, and exactly Ren’s point.

[quote=paramount]
Temecula schools: not bad, not great either. They are average as far as I am concerned, nothing special.
[/quote]

I agree with this.

[quote=paramount]
Gangs: Yes, Temecula DOES have gangs. There was a gang murder just 2 months ago, look it up (my condolences and respect to the families). There has been plenty of gang crime and even gang related murder in Temecula. Go to pe.com and do your research.
[/quote]

No comment. Having lived in Brooklyn for a few years, I always don’t understand what Californian means by gangs.

[quote=paramount]
Basically no jobs
Long commute
Also, many of Temecula’s foreclosures/short sales were bought up by “investors” – on my street for example of about 30 houses, less than 10 are owner occupied.
[/quote]

I agree with all these and I think people do need to have rosy glasses in order not to see these bad sides of Temecula. In addition, the foreclosure and shortsales just kept coming up, not counting all the real hidden inventory (people who wanted to sell due to relocation, divorce, etc, but can’t afford at today’s price). On the other hand, brown lawn is definitely not as widespread as two years ago. I don’t know what’s the reason. I guess at least those who are foreclosed now at least can afford to pay water bills.
I therefore don’t think Temecula house price will appreciate further and faster at today’s price. Given the recent price increases, I don’t think they are particularly good for rental property as well. You get about break-even cash flow but no/little price appreciation (and possible price depreciation). So I don’t think one should look this way for investment opportunity. But buying as a replacement of renting does make sense. Because in worst case (if things didn’t work out for you), you can get out with break-even cash flow. That’s what you couldn’t do in most of San Diego.

[carlsbadworker]

[quote=bearishgurl]I’m not trying to trash the area or bully Piggs who like TV as I know nothing about it. I’m just trying to find out why some Piggs are saying it’s a better investment to live in TV (or buying in TV will get them “further and faster down the road” to retirement) with all factors taken into consideration. [/quote]

I can address this one. I think the notion that house price appreciation is a road to retirement is an illusion. Yes, if you are very lucky, and you bought before an area’s economy starts to boom, then it migth be true, but it’s not true in most general cases. So the only roads to retirements are:
1. Have more income, which depends on your talent.
2. Have less expenses, which is controllable. Housing expense is the biggest expense item in most families. Therefore, by reducing that expense (including associated property taxes) through living in area like Temecula, you will have more savings for true investments. Businesses, stocks, bonds, rental properties…I don’t care. All these generate residue income and produce cashflow in the long term. It’s better than spending into a more expensive houses (which corresponds to a higher rental costs even if you can make it cash flow). Remember the goal is to reduce costs. I don’t understand how people who live in expensive neighborhood can claim that they are getting riches by having more equity in their houses. Again, unless you are very lucky that the house price in your town is going to appreciate much faster. The price you have to pay is going to be higher than its rental equivalent each month. And its rental equivalent is higher that low-cost areas, therefore so is your eventual shelter expenses. And that money can get better appreication elsewhere than equity in the house.
But, wait a minute, I assumed that the house price appreciated the same in all areas. If as realtors always say, location, location, location. Maybe better neighborhoods can get better price appreciation in the long run?? I agree with this possibility. Therefore, Temecula is a reasonable hedge against that scenario. It has OK to good schools, relatively wealthy population and more professionals that have a chance to move up in the corporate ladder in the future.
It can’t be a proven road to retirement (nothing concerning the future can be proved), but it is a good and educated guess.

[carlsbadworker]

[quote=bearishgurl]I’m not trying to trash the area or bully Piggs who like TV as I know nothing about it. I’m just trying to find out why some Piggs are saying it’s a better investment to live in TV (or buying in TV will get them “further and faster down the road” to retirement) with all factors taken into consideration. [/quote]

I can address this one. I think the notion that house price appreciation is a road to retirement is an illusion. Yes, if you are very lucky, and you bought before an area’s economy starts to boom, then it migth be true, but it’s not true in most general cases. So the only roads to retirements are:
1. Have more income, which depends on your talent.
2. Have less expenses, which is controllable. Housing expense is the biggest expense item in most families. Therefore, by reducing that expense (including associated property taxes) through living in area like Temecula, you will have more savings for true investments. Businesses, stocks, bonds, rental properties…I don’t care. All these generate residue income and produce cashflow in the long term. It’s better than spending into a more expensive houses (which corresponds to a higher rental costs even if you can make it cash flow). Remember the goal is to reduce costs. I don’t understand how people who live in expensive neighborhood can claim that they are getting riches by having more equity in their houses. Again, unless you are very lucky that the house price in your town is going to appreciate much faster. The price you have to pay is going to be higher than its rental equivalent each month. And its rental equivalent is higher that low-cost areas, therefore so is your eventual shelter expenses. And that money can get better appreication elsewhere than equity in the house.
But, wait a minute, I assumed that the house price appreciated the same in all areas. If as realtors always say, location, location, location. Maybe better neighborhoods can get better price appreciation in the long run?? I agree with this possibility. Therefore, Temecula is a reasonable hedge against that scenario. It has OK to good schools, relatively wealthy population and more professionals that have a chance to move up in the corporate ladder in the future.
It can’t be a proven road to retirement (nothing concerning the future can be proved), but it is a good and educated guess.

[carlsbadworker]

[quote=bearishgurl]I’m not trying to trash the area or bully Piggs who like TV as I know nothing about it. I’m just trying to find out why some Piggs are saying it’s a better investment to live in TV (or buying in TV will get them “further and faster down the road” to retirement) with all factors taken into consideration. [/quote]

I can address this one. I think the notion that house price appreciation is a road to retirement is an illusion. Yes, if you are very lucky, and you bought before an area’s economy starts to boom, then it migth be true, but it’s not true in most general cases. So the only roads to retirements are:
1. Have more income, which depends on your talent.
2. Have less expenses, which is controllable. Housing expense is the biggest expense item in most families. Therefore, by reducing that expense (including associated property taxes) through living in area like Temecula, you will have more savings for true investments. Businesses, stocks, bonds, rental properties…I don’t care. All these generate residue income and produce cashflow in the long term. It’s better than spending into a more expensive houses (which corresponds to a higher rental costs even if you can make it cash flow). Remember the goal is to reduce costs. I don’t understand how people who live in expensive neighborhood can claim that they are getting riches by having more equity in their houses. Again, unless you are very lucky that the house price in your town is going to appreciate much faster. The price you have to pay is going to be higher than its rental equivalent each month. And its rental equivalent is higher that low-cost areas, therefore so is your eventual shelter expenses. And that money can get better appreication elsewhere than equity in the house.
But, wait a minute, I assumed that the house price appreciated the same in all areas. If as realtors always say, location, location, location. Maybe better neighborhoods can get better price appreciation in the long run?? I agree with this possibility. Therefore, Temecula is a reasonable hedge against that scenario. It has OK to good schools, relatively wealthy population and more professionals that have a chance to move up in the corporate ladder in the future.
It can’t be a proven road to retirement (nothing concerning the future can be proved), but it is a good and educated guess.

[carlsbadworker]

[quote=bearishgurl]I’m not trying to trash the area or bully Piggs who like TV as I know nothing about it. I’m just trying to find out why some Piggs are saying it’s a better investment to live in TV (or buying in TV will get them “further and faster down the road” to retirement) with all factors taken into consideration. [/quote]

I can address this one. I think the notion that house price appreciation is a road to retirement is an illusion. Yes, if you are very lucky, and you bought before an area’s economy starts to boom, then it migth be true, but it’s not true in most general cases. So the only roads to retirements are:
1. Have more income, which depends on your talent.
2. Have less expenses, which is controllable. Housing expense is the biggest expense item in most families. Therefore, by reducing that expense (including associated property taxes) through living in area like Temecula, you will have more savings for true investments. Businesses, stocks, bonds, rental properties…I don’t care. All these generate residue income and produce cashflow in the long term. It’s better than spending into a more expensive houses (which corresponds to a higher rental costs even if you can make it cash flow). Remember the goal is to reduce costs. I don’t understand how people who live in expensive neighborhood can claim that they are getting riches by having more equity in their houses. Again, unless you are very lucky that the house price in your town is going to appreciate much faster. The price you have to pay is going to be higher than its rental equivalent each month. And its rental equivalent is higher that low-cost areas, therefore so is your eventual shelter expenses. And that money can get better appreication elsewhere than equity in the house.
But, wait a minute, I assumed that the house price appreciated the same in all areas. If as realtors always say, location, location, location. Maybe better neighborhoods can get better price appreciation in the long run?? I agree with this possibility. Therefore, Temecula is a reasonable hedge against that scenario. It has OK to good schools, relatively wealthy population and more professionals that have a chance to move up in the corporate ladder in the future.
It can’t be a proven road to retirement (nothing concerning the future can be proved), but it is a good and educated guess.

[carlsbadworker]

[quote=bearishgurl]I’m not trying to trash the area or bully Piggs who like TV as I know nothing about it. I’m just trying to find out why some Piggs are saying it’s a better investment to live in TV (or buying in TV will get them “further and faster down the road” to retirement) with all factors taken into consideration. [/quote]

I can address this one. I think the notion that house price appreciation is a road to retirement is an illusion. Yes, if you are very lucky, and you bought before an area’s economy starts to boom, then it migth be true, but it’s not true in most general cases. So the only roads to retirements are:
1. Have more income, which depends on your talent.
2. Have less expenses, which is controllable. Housing expense is the biggest expense item in most families. Therefore, by reducing that expense (including associated property taxes) through living in area like Temecula, you will have more savings for true investments. Businesses, stocks, bonds, rental properties…I don’t care. All these generate residue income and produce cashflow in the long term. It’s better than spending into a more expensive houses (which corresponds to a higher rental costs even if you can make it cash flow). Remember the goal is to reduce costs. I don’t understand how people who live in expensive neighborhood can claim that they are getting riches by having more equity in their houses. Again, unless you are very lucky that the house price in your town is going to appreciate much faster. The price you have to pay is going to be higher than its rental equivalent each month. And its rental equivalent is higher that low-cost areas, therefore so is your eventual shelter expenses. And that money can get better appreication elsewhere than equity in the house.
But, wait a minute, I assumed that the house price appreciated the same in all areas. If as realtors always say, location, location, location. Maybe better neighborhoods can get better price appreciation in the long run?? I agree with this possibility. Therefore, Temecula is a reasonable hedge against that scenario. It has OK to good schools, relatively wealthy population and more professionals that have a chance to move up in the corporate ladder in the future.
It can’t be a proven road to retirement (nothing concerning the future can be proved), but it is a good and educated guess.

[bearishgurl]

[quote=Ren]It’s not that the value of my house in Temecula will enable me to retire early on the coast, it’s that my $1k mortgage will enable me to save several thousand more per month than I would otherwise, over the next 15 years, all of it reinvested in rental property. Our current property will become a rental as well, and it was chosen with that in mind. For the retirement property we’re thinking 40% down and a 15-year loan, so it won’t be completely mortgage-free, but because other sources of income will cover it, it’s not a concern . . .

Anything near the coast would be a better long-term investment than TV, if you buy at the right price. In my opinion, we’re not there yet.[/quote]

[quote=bearishgurl]Ren, how much (%) lower would the “right price” be for SD County coastal zip codes? And how long do you think it will take the market to get there? Do you think the market on the “coast” will come down in price enough by the time you’re ready to buy a property to retire in?[/quote]

[quote=Ren]All I know is that coastal properties are overpriced today, maybe by 20%, and being artificially propped up. The reason I consider the coast a better long-term investment is because it will always be easier to rent out a property there[/quote]

Ren, I don’t know how old you are but since the “coast” is where you want to retire, why don’t you consider purchasing a fixer (w/no MR or HOA) to rehab and then place into rental service there, using today’s low fixed interest rates, instead of investing in low-priced rentals in TV that may never appreciate and may even go down further. When scoping one out, do not get so caught up in “square footage” as long as it’s over 1000 sf with at least a one-car (attached or detached) garage and on a decent-sized lot. Remember, it will be a rental home and your retirement home.

I consider myself a bear in general but believe desireable “coastal” properties (west of the 5 in SD County) will NOT further deteriorate 20% like you think they will.

With the scenario you painted, I see you over-invested in TV by the time you want to retire and not being able to easily unload your rental properties or successfully retrieve your full downpayments from sale. You’re banking here that all these newer +/- $100K condos in TV will still be looking good and crisp, fetch good rents and their HOA’s will be managed perfectly for the long term. How do you know the bulk of entire complexes won’t become 100% rentals, bought up by REITS (blocks of investors) and turned over to the Section 8 program? This has HAPPENED in PQ and a few other areas which were considered “upscale” at the time of buildout and for a few years afterwards. When this happens, the REIT’s pay about .50 on the dollar (or less) for these units and THAT IS THE *NEW* COMP.

More than a few times, I’ve seen retirees who end up regretting they invested so heavily in low-income rentals they can’t easily unload. If you choose to leave TV when your kids go away to college, you may then find yourself running back up there several times a week to cope with endless tenant issues since you state you will manage your units yourself.

Also, with your “investment strategy,” keep in mind a couple of things. HOA dues always go UP, never down. Even though you can write HOA dues off on your taxes for a rental unit, you STILL have to PAY the dues first and they (as well as unexpected “special assessments”) can be VERY detrimental to your monthly cash flow. And when you go to purchase more property and already own rental unit(s), a lender typically only gives you credit for 9 mos. year rental income, NOT 11 months, as you previously stated. And you may have to prove to the lender the steady receipt of rental income over a period of time, when seeking another mortgage loan.

Just offering another perspective re: not putting all your eggs in one basket :=}

[bearishgurl]

[quote=Ren]It’s not that the value of my house in Temecula will enable me to retire early on the coast, it’s that my $1k mortgage will enable me to save several thousand more per month than I would otherwise, over the next 15 years, all of it reinvested in rental property. Our current property will become a rental as well, and it was chosen with that in mind. For the retirement property we’re thinking 40% down and a 15-year loan, so it won’t be completely mortgage-free, but because other sources of income will cover it, it’s not a concern . . .

Anything near the coast would be a better long-term investment than TV, if you buy at the right price. In my opinion, we’re not there yet.[/quote]

[quote=bearishgurl]Ren, how much (%) lower would the “right price” be for SD County coastal zip codes? And how long do you think it will take the market to get there? Do you think the market on the “coast” will come down in price enough by the time you’re ready to buy a property to retire in?[/quote]

[quote=Ren]All I know is that coastal properties are overpriced today, maybe by 20%, and being artificially propped up. The reason I consider the coast a better long-term investment is because it will always be easier to rent out a property there[/quote]

Ren, I don’t know how old you are but since the “coast” is where you want to retire, why don’t you consider purchasing a fixer (w/no MR or HOA) to rehab and then place into rental service there, using today’s low fixed interest rates, instead of investing in low-priced rentals in TV that may never appreciate and may even go down further. When scoping one out, do not get so caught up in “square footage” as long as it’s over 1000 sf with at least a one-car (attached or detached) garage and on a decent-sized lot. Remember, it will be a rental home and your retirement home.

I consider myself a bear in general but believe desireable “coastal” properties (west of the 5 in SD County) will NOT further deteriorate 20% like you think they will.

With the scenario you painted, I see you over-invested in TV by the time you want to retire and not being able to easily unload your rental properties or successfully retrieve your full downpayments from sale. You’re banking here that all these newer +/- $100K condos in TV will still be looking good and crisp, fetch good rents and their HOA’s will be managed perfectly for the long term. How do you know the bulk of entire complexes won’t become 100% rentals, bought up by REITS (blocks of investors) and turned over to the Section 8 program? This has HAPPENED in PQ and a few other areas which were considered “upscale” at the time of buildout and for a few years afterwards. When this happens, the REIT’s pay about .50 on the dollar (or less) for these units and THAT IS THE *NEW* COMP.

More than a few times, I’ve seen retirees who end up regretting they invested so heavily in low-income rentals they can’t easily unload. If you choose to leave TV when your kids go away to college, you may then find yourself running back up there several times a week to cope with endless tenant issues since you state you will manage your units yourself.

Also, with your “investment strategy,” keep in mind a couple of things. HOA dues always go UP, never down. Even though you can write HOA dues off on your taxes for a rental unit, you STILL have to PAY the dues first and they (as well as unexpected “special assessments”) can be VERY detrimental to your monthly cash flow. And when you go to purchase more property and already own rental unit(s), a lender typically only gives you credit for 9 mos. year rental income, NOT 11 months, as you previously stated. And you may have to prove to the lender the steady receipt of rental income over a period of time, when seeking another mortgage loan.

Just offering another perspective re: not putting all your eggs in one basket :=}

[bearishgurl]

[quote=Ren]It’s not that the value of my house in Temecula will enable me to retire early on the coast, it’s that my $1k mortgage will enable me to save several thousand more per month than I would otherwise, over the next 15 years, all of it reinvested in rental property. Our current property will become a rental as well, and it was chosen with that in mind. For the retirement property we’re thinking 40% down and a 15-year loan, so it won’t be completely mortgage-free, but because other sources of income will cover it, it’s not a concern . . .

Anything near the coast would be a better long-term investment than TV, if you buy at the right price. In my opinion, we’re not there yet.[/quote]

[quote=bearishgurl]Ren, how much (%) lower would the “right price” be for SD County coastal zip codes? And how long do you think it will take the market to get there? Do you think the market on the “coast” will come down in price enough by the time you’re ready to buy a property to retire in?[/quote]

[quote=Ren]All I know is that coastal properties are overpriced today, maybe by 20%, and being artificially propped up. The reason I consider the coast a better long-term investment is because it will always be easier to rent out a property there[/quote]

Ren, I don’t know how old you are but since the “coast” is where you want to retire, why don’t you consider purchasing a fixer (w/no MR or HOA) to rehab and then place into rental service there, using today’s low fixed interest rates, instead of investing in low-priced rentals in TV that may never appreciate and may even go down further. When scoping one out, do not get so caught up in “square footage” as long as it’s over 1000 sf with at least a one-car (attached or detached) garage and on a decent-sized lot. Remember, it will be a rental home and your retirement home.

I consider myself a bear in general but believe desireable “coastal” properties (west of the 5 in SD County) will NOT further deteriorate 20% like you think they will.

With the scenario you painted, I see you over-invested in TV by the time you want to retire and not being able to easily unload your rental properties or successfully retrieve your full downpayments from sale. You’re banking here that all these newer +/- $100K condos in TV will still be looking good and crisp, fetch good rents and their HOA’s will be managed perfectly for the long term. How do you know the bulk of entire complexes won’t become 100% rentals, bought up by REITS (blocks of investors) and turned over to the Section 8 program? This has HAPPENED in PQ and a few other areas which were considered “upscale” at the time of buildout and for a few years afterwards. When this happens, the REIT’s pay about .50 on the dollar (or less) for these units and THAT IS THE *NEW* COMP.

More than a few times, I’ve seen retirees who end up regretting they invested so heavily in low-income rentals they can’t easily unload. If you choose to leave TV when your kids go away to college, you may then find yourself running back up there several times a week to cope with endless tenant issues since you state you will manage your units yourself.

Also, with your “investment strategy,” keep in mind a couple of things. HOA dues always go UP, never down. Even though you can write HOA dues off on your taxes for a rental unit, you STILL have to PAY the dues first and they (as well as unexpected “special assessments”) can be VERY detrimental to your monthly cash flow. And when you go to purchase more property and already own rental unit(s), a lender typically only gives you credit for 9 mos. year rental income, NOT 11 months, as you previously stated. And you may have to prove to the lender the steady receipt of rental income over a period of time, when seeking another mortgage loan.

Just offering another perspective re: not putting all your eggs in one basket :=}

[bearishgurl]

[quote=Ren]It’s not that the value of my house in Temecula will enable me to retire early on the coast, it’s that my $1k mortgage will enable me to save several thousand more per month than I would otherwise, over the next 15 years, all of it reinvested in rental property. Our current property will become a rental as well, and it was chosen with that in mind. For the retirement property we’re thinking 40% down and a 15-year loan, so it won’t be completely mortgage-free, but because other sources of income will cover it, it’s not a concern . . .

Anything near the coast would be a better long-term investment than TV, if you buy at the right price. In my opinion, we’re not there yet.[/quote]

[quote=bearishgurl]Ren, how much (%) lower would the “right price” be for SD County coastal zip codes? And how long do you think it will take the market to get there? Do you think the market on the “coast” will come down in price enough by the time you’re ready to buy a property to retire in?[/quote]

[quote=Ren]All I know is that coastal properties are overpriced today, maybe by 20%, and being artificially propped up. The reason I consider the coast a better long-term investment is because it will always be easier to rent out a property there[/quote]

Ren, I don’t know how old you are but since the “coast” is where you want to retire, why don’t you consider purchasing a fixer (w/no MR or HOA) to rehab and then place into rental service there, using today’s low fixed interest rates, instead of investing in low-priced rentals in TV that may never appreciate and may even go down further. When scoping one out, do not get so caught up in “square footage” as long as it’s over 1000 sf with at least a one-car (attached or detached) garage and on a decent-sized lot. Remember, it will be a rental home and your retirement home.

I consider myself a bear in general but believe desireable “coastal” properties (west of the 5 in SD County) will NOT further deteriorate 20% like you think they will.

With the scenario you painted, I see you over-invested in TV by the time you want to retire and not being able to easily unload your rental properties or successfully retrieve your full downpayments from sale. You’re banking here that all these newer +/- $100K condos in TV will still be looking good and crisp, fetch good rents and their HOA’s will be managed perfectly for the long term. How do you know the bulk of entire complexes won’t become 100% rentals, bought up by REITS (blocks of investors) and turned over to the Section 8 program? This has HAPPENED in PQ and a few other areas which were considered “upscale” at the time of buildout and for a few years afterwards. When this happens, the REIT’s pay about .50 on the dollar (or less) for these units and THAT IS THE *NEW* COMP.

More than a few times, I’ve seen retirees who end up regretting they invested so heavily in low-income rentals they can’t easily unload. If you choose to leave TV when your kids go away to college, you may then find yourself running back up there several times a week to cope with endless tenant issues since you state you will manage your units yourself.

Also, with your “investment strategy,” keep in mind a couple of things. HOA dues always go UP, never down. Even though you can write HOA dues off on your taxes for a rental unit, you STILL have to PAY the dues first and they (as well as unexpected “special assessments”) can be VERY detrimental to your monthly cash flow. And when you go to purchase more property and already own rental unit(s), a lender typically only gives you credit for 9 mos. year rental income, NOT 11 months, as you previously stated. And you may have to prove to the lender the steady receipt of rental income over a period of time, when seeking another mortgage loan.

Just offering another perspective re: not putting all your eggs in one basket :=}

[bearishgurl]

[quote=Ren]It’s not that the value of my house in Temecula will enable me to retire early on the coast, it’s that my $1k mortgage will enable me to save several thousand more per month than I would otherwise, over the next 15 years, all of it reinvested in rental property. Our current property will become a rental as well, and it was chosen with that in mind. For the retirement property we’re thinking 40% down and a 15-year loan, so it won’t be completely mortgage-free, but because other sources of income will cover it, it’s not a concern . . .

Anything near the coast would be a better long-term investment than TV, if you buy at the right price. In my opinion, we’re not there yet.[/quote]

[quote=bearishgurl]Ren, how much (%) lower would the “right price” be for SD County coastal zip codes? And how long do you think it will take the market to get there? Do you think the market on the “coast” will come down in price enough by the time you’re ready to buy a property to retire in?[/quote]

[quote=Ren]All I know is that coastal properties are overpriced today, maybe by 20%, and being artificially propped up. The reason I consider the coast a better long-term investment is because it will always be easier to rent out a property there[/quote]

Ren, I don’t know how old you are but since the “coast” is where you want to retire, why don’t you consider purchasing a fixer (w/no MR or HOA) to rehab and then place into rental service there, using today’s low fixed interest rates, instead of investing in low-priced rentals in TV that may never appreciate and may even go down further. When scoping one out, do not get so caught up in “square footage” as long as it’s over 1000 sf with at least a one-car (attached or detached) garage and on a decent-sized lot. Remember, it will be a rental home and your retirement home.

I consider myself a bear in general but believe desireable “coastal” properties (west of the 5 in SD County) will NOT further deteriorate 20% like you think they will.

With the scenario you painted, I see you over-invested in TV by the time you want to retire and not being able to easily unload your rental properties or successfully retrieve your full downpayments from sale. You’re banking here that all these newer +/- $100K condos in TV will still be looking good and crisp, fetch good rents and their HOA’s will be managed perfectly for the long term. How do you know the bulk of entire complexes won’t become 100% rentals, bought up by REITS (blocks of investors) and turned over to the Section 8 program? This has HAPPENED in PQ and a few other areas which were considered “upscale” at the time of buildout and for a few years afterwards. When this happens, the REIT’s pay about .50 on the dollar (or less) for these units and THAT IS THE *NEW* COMP.

More than a few times, I’ve seen retirees who end up regretting they invested so heavily in low-income rentals they can’t easily unload. If you choose to leave TV when your kids go away to college, you may then find yourself running back up there several times a week to cope with endless tenant issues since you state you will manage your units yourself.

Also, with your “investment strategy,” keep in mind a couple of things. HOA dues always go UP, never down. Even though you can write HOA dues off on your taxes for a rental unit, you STILL have to PAY the dues first and they (as well as unexpected “special assessments”) can be VERY detrimental to your monthly cash flow. And when you go to purchase more property and already own rental unit(s), a lender typically only gives you credit for 9 mos. year rental income, NOT 11 months, as you previously stated. And you may have to prove to the lender the steady receipt of rental income over a period of time, when seeking another mortgage loan.

Just offering another perspective re: not putting all your eggs in one basket :=}

[carlsbadworker]

[quote=bearishgurl]Just offering another perspective re: not putting all your eggs in one basket :=}[/quote]

I agree with this kind of thinking.

But I am wondering if the real estate experts on this site could tell us what is the best reliable indicator of the future home price appreciation?

I mean, anyone knows that cheaper is better, buying at 100x rent is better than 125x rent, but that’s from the perspective of investment safety (helped by the rental yield). If we don’t rely on the fuzzy term such as “location”, what is the best indicator for price appreciation? Job growth? Active/Sale ratio? Depressed seller ratio?

Has no one digged up the data and did any research on this?

[carlsbadworker]

[quote=bearishgurl]Just offering another perspective re: not putting all your eggs in one basket :=}[/quote]

I agree with this kind of thinking.

But I am wondering if the real estate experts on this site could tell us what is the best reliable indicator of the future home price appreciation?

I mean, anyone knows that cheaper is better, buying at 100x rent is better than 125x rent, but that’s from the perspective of investment safety (helped by the rental yield). If we don’t rely on the fuzzy term such as “location”, what is the best indicator for price appreciation? Job growth? Active/Sale ratio? Depressed seller ratio?

Has no one digged up the data and did any research on this?

[carlsbadworker]

[quote=bearishgurl]Just offering another perspective re: not putting all your eggs in one basket :=}[/quote]

I agree with this kind of thinking.

But I am wondering if the real estate experts on this site could tell us what is the best reliable indicator of the future home price appreciation?

I mean, anyone knows that cheaper is better, buying at 100x rent is better than 125x rent, but that’s from the perspective of investment safety (helped by the rental yield). If we don’t rely on the fuzzy term such as “location”, what is the best indicator for price appreciation? Job growth? Active/Sale ratio? Depressed seller ratio?

Has no one digged up the data and did any research on this?

[carlsbadworker]

[quote=bearishgurl]Just offering another perspective re: not putting all your eggs in one basket :=}[/quote]

I agree with this kind of thinking.

But I am wondering if the real estate experts on this site could tell us what is the best reliable indicator of the future home price appreciation?

I mean, anyone knows that cheaper is better, buying at 100x rent is better than 125x rent, but that’s from the perspective of investment safety (helped by the rental yield). If we don’t rely on the fuzzy term such as “location”, what is the best indicator for price appreciation? Job growth? Active/Sale ratio? Depressed seller ratio?

Has no one digged up the data and did any research on this?

[Author]

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