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My clients are constantly asking me "How low do you think prices will get?" While no one can say for sure how low
they will get, I can tell you the lowest they can possibly get. 'The Bottom' in San Diego Real Estate is the point at
which rents on a single unit covers investor's costs. Investor's costs are: maintenance, mortgage, hoa, taxes, and
replacement of down payment. Most experienced Real Estate investors look for the Break Even point as a good
investment because the property pays for itself at the beginning, then over time rents go up and long term
appreciation.
I always recommend 2 bedroom condos as a long term investment rental. Most inexperienced investors will try
single family homes. While, if in the right location, you can make money fixing and flipping single family homes, for
long term rentals, 2 bedroom condos are much better. Think about this- you can buy a single family home in East
County or a 2 bedroom condo in Pacific Beach. The price will be about the same. The rents will be about the same.
The management of a 2 bedroom condo is about as easy as it gets, you would only be responsible for whats inside
the paint: Toilets, sinks, kitchen, carpet, paint, thats it. Pipes inside the walls- not your problem, hoa. Roof- not your
problem, hoa. Structure- not your problem, hoa.
Clearly the time & stress involved in managing and maintaining one single family home is about 3-10 times that of a 2
bedroom condo. This means you can have more investment properties and spend less time dealing with them.
Below is a chart of both how low the market can get and the numbers to look at when buying an investment property.
they will get, I can tell you the lowest they can possibly get. 'The Bottom' in San Diego Real Estate is the point at
which rents on a single unit covers investor's costs. Investor's costs are: maintenance, mortgage, hoa, taxes, and
replacement of down payment. Most experienced Real Estate investors look for the Break Even point as a good
investment because the property pays for itself at the beginning, then over time rents go up and long term
appreciation.
I always recommend 2 bedroom condos as a long term investment rental. Most inexperienced investors will try
single family homes. While, if in the right location, you can make money fixing and flipping single family homes, for
long term rentals, 2 bedroom condos are much better. Think about this- you can buy a single family home in East
County or a 2 bedroom condo in Pacific Beach. The price will be about the same. The rents will be about the same.
The management of a 2 bedroom condo is about as easy as it gets, you would only be responsible for whats inside
the paint: Toilets, sinks, kitchen, carpet, paint, thats it. Pipes inside the walls- not your problem, hoa. Roof- not your
problem, hoa. Structure- not your problem, hoa.
Clearly the time & stress involved in managing and maintaining one single family home is about 3-10 times that of a 2
bedroom condo. This means you can have more investment properties and spend less time dealing with them.
Below is a chart of both how low the market can get and the numbers to look at when buying an investment property.
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For Example: You know that a 2 bedroom condo in a certain area will rent for 1500 per month. You see if there
are any listed for 177,000. You notice there are three. One needs $3000 to make it rentable so you would offer
156,000; Another needs $4000 to make it rentable so you would offer 155,000; The last needs $6000 to make it
rentable so you would offer 153,000.
are any listed for 177,000. You notice there are three. One needs $3000 to make it rentable so you would offer
156,000; Another needs $4000 to make it rentable so you would offer 155,000; The last needs $6000 to make it
rentable so you would offer 153,000.