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Escoguy
Participantsp
I agree about students, and perhaps teachers.
I’ve had two nurses as tenants and they’ve been able to afford rents in the $3,500 range.
Firefighters are a category unto themselves, it seems a fair number get a lot of overtime so pay in the 150K range isn’t as unusual as one might think.
In the past 24 months, I’ve had four tenants change out (total of four local rentals), each time rents have gone up by $200-$300 so over a two year period 25% has happened for me in 92127/92078/92027.
I was likely below market but I have to agree that the increases are significant.
I’m almost glad when a tenant gives notice now.ParticipantWith that thought, I showed my friend who wants to live by the beach that inland rents are not that different than coastal rents (the size of the place is just smaller).
But most rents cap out at the $4,000/month range.
So yes, a person could buy a home inland and rent it out for $3000-$3,500/month and then get their “coastal place” as a rental for a similar amount just perhaps 2 BR instead of 4BR.
Not sure how many people actually try this.
ParticipantWhere do you work?
We’re in Escondido and I’ve worked downtown, Lakeside and Carmel Valley, and Vista. I’ve usually been able to commute within 35-40 min to anywhere from south Escondido (used HOV to downtown).
Why do I ask this? For the area, the price is about right but you will get more space in Escondido.
You say you’re a young couple. I’m assuming combined income of 200K+ for a home like this. This may require both of you to work to pay the mortgage.
If having kids is important soon, getting a cheaper house may be a better option.
Mostly depends on what lifestyle you want.
ParticipantIf I sold one of my six, then I’d likely pay down debt but my cost of funding is 3.05% (3 fixed loans, one variable).
So the real next cost after deductions and inflation is basically zero.
Why pay that off or sell when I get 6% gross yields on current market value.
One would have to think demand would be much softer going forward but most properties rent in a few days.
April 24, 2017 at 4:09 PM in reply to: Chula Vista; if I don’t buy now will I be shut out forever? #806331Participanthttps://www.census.gov/content/dam/Census/library/publications/2015/demo/p25-1143.pdf
Much depends on if this really happens.
With the forecast for 100M more people in the US over next 45 years, it is entirely possible real estate won’t “crash” again as it did in 2008-11.
Future downturns may be more subtle and regional with far less dramatic impact on the overall financial system.
The US needs immigration to pay for the future entitlements of retirees.
There is no alternative.
ParticipantI was a few hundred below market on two SFHs last year.
Tenants had been there 3 years and decided to buy.
Was able to go up about $350 on average on each.
Needed to spend $3000 on one and about $6000 on other to get everything perfect. But expect tenants to stay longer.
Long story short, if you’re undercharging rent, you’re probably also deferring maintenance and other normal upgrades. It’s best to get closer to the market and also do what is necessary to keep the property in top shape. San Diego is more and more a premium market (even at the low end).
With new tenants paying more, more demands were made but overall the situation is much better.
Keep in mind, rents could go down in a few years if many go away for reasons yet to be seen. Not likely but possible.
Participantgas
Up here in Escondido, I often thought of the number of SFH occupied by retired persons was a risk but as I realize that many of them will live to be 80+ perhaps 90, the day of reckoning seems to be a bit further off than I’d thought a few years ago.
I don’t know how much good data there is on value/income impact of one generation dying off and the transfer of property to a younger one with perhaps lower income and less capability to support the high price as they are “buying in” vs. having ridden the appreciation up over decades.
I guess much depends on the relative numbers and the length of time i.e. a 10% transfer over 10 years wouldn’t have the same impact as a 20% transfer over years. At this juncture, it seems like realtors/investors buyers would just welcome more inventory in general. Would be interesting to know if there is data as to why sellers sell (moving/retiring/death) etc.
If there is significant fluctuation, then perhaps there is a potential inventory overhang at some point but don’t see it in near/mid term.
March 14, 2017 at 9:25 PM in reply to: Why it’s not a good time to buy a house in San Diego! #806021ParticipantWe bought four short sales in 2013-2014.
Banks were selling but you needed to figure out how to do it.
Once you find a formula that works, it was wash rinse repeat.
Given it took a lot of equity with an average of 25% down-payments. So doing this took 500K cash even this for four properties.
I’d suggest anyone who is only focused on SD to look north at LA. That’s where the prices are insane. Anything decent is 1.7M plus in certain areas which would be 600-650K here. So no I don’t see much of a drop coming any time soon.
It’s early in the rental spring market but will be interesting to see how quickly homes go this year.
ParticipantMy unit is same size. Most likely it is just old.
But funny how Zillow just announced this which is too bad as it’s useful for listings
ParticipantWe got rebates for two lawns. Should have done a third.
We’ve done the solar thing on five properties: 14% ROI = 10K in annual cash flow with 70K investment.
we have two plug in cars, may upgrade to a Model 3 or another 200+ mile range EV in next 2 years.
so we’re on it and it does save money. admittedly, there may be pressure to cut back on some if this if we hit a serious recession, hopefully Trump will succeed (didn’t vote for him) so we get moderate growth for near future.
ParticipantThere is a good weather blog I follow:
He has a posting on the drought and knows far more than me about this.
Key point: there was a high pressure ridge off the Pacific Northwest for the past few years which got in the way of the normal rains. That is gone now, so unless it comes back, we should be out of the drought.
Participantharvey,
Thanks for providing some background on your personal experiences.
The adoption step is one of the best things a person can do in life.
Admittedly, the former USSR kind of sucked me in and I ended up working there about 15 years. It’s really a fascinating place and I’m sure at some point in time I’ll be back.
Speaking of flights to Russia, my first one was during Gorbachev’s attempt at prohibition in 1987. Needless to say, that didn’t work and was a classic example of the limits of government policy, no matter how well intended.
Participantharvey
Perhaps if you had any exposure to that country/region, please share this with us.
Simple case in point, most Russians don’t have a mortgage and are never at risk of losing their home. Employers tend to take a more flexible approach to financial crises and don’t lay everyone off blindly and then scramble to find workers for the next upswing.
If you want grim reading on Russia, look up “dying too young”.
http://documents.worldbank.org/curated/en/825591468294635066/Summary
The reality is that discussing Russia can be a fascinating topic but only if real substance is offered. If there’s anything you’d like to know, I’d be happy to share in a serious discussion.
Respectfully,
ParticipantFlyer
Biggest drag for Russian was the drop in oil prices. Sanctions were more of an add on later. Like an 80/20 split. If the Russian leadership had foreseen the drop in oil prices, they might have passed on Crimea.
Russian real estate prices in USD are down significantly since 2013 then but have recovered some this year with the rise in the price of oil.
Guys like this are the best chance for Russia and normal relations with the US.
We can only wish him and those like him well.
Prices even in 3rd third cities will always be higher than the US for many reasons.
Key problem is the inability to produce large amounts of housing in a cost effective manner (partly due to corruption/lack of infrastructure/lack of financing).The list of reasons is fairly long and isn’t easy to resolve.
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