Home Buying in San Jose>Question Details

rsondhi15, Home Buyer in San Jose, CA

would like to invest in income producing condo in a good school district. Any advice? Thanks.

Asked by rsondhi15, San Jose, CA Wed Jun 12, 2013

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7
Key is low hoa fee in a convenient area.
There are some SFH in the low $400 that still generates positive case flow.

In a year or so, the entire South Bay will join SF, Peninsula having negative cash flow as before.
If anything it would be based on speculation of appreciation if not for income tax deduction purpose to have one of investment homes.

Sam Shueh
Keller Williams Cupertino Realty
(408) 425-1601
1 vote Thank Flag Link Fri Aug 23, 2013
As an active investor, I consider many factors that are important for a good long term return.

School district is typically not one of those. The reason why? In the bay area school districts that have great ratings equal high cost of real estate and low cash on cash ROI.

It may be a safer place to buy for tenant quality and appreciation but if you are buying for long term you would be better off with a mid-market investment.

There are a few areas in the bay that produce good returns for condo's.

For further advice feel free to connect via my website: http://www.RealEstateInCampbell.com

-James
1 vote Thank Flag Link Sun Jun 16, 2013
Make sure you run the numbers closely and make sure it cash flows. You have to look at mortgage + property taxes + hoa + insurance + vacancy/maintenance. The rent should be well above that and provide a positive cash flow. I don't believe in buying properties that lose money every month on the hope they will appreciate. Appreciation should be icing on the cake.

Also, with condos look out for:
1. % of units occupied by owners
2. % of units late on hoa dues
3. how much money the hoa has in it's reserve fund

#3 to me is the most important. If a condo has a decent reserve fund, they can pay for any maintenance issues that pop up without a special assessment.
1 vote Thank Flag Link Wed Jun 12, 2013
What type of return are you seeking? Equity return, Cash on Cash, or Cash Flow. How long do you plan on holding the property? How much down if financing. If Financing what is your budget?

With that then we look at which areas. The more you can afford the more desirable the area and the higher the cost to purchase.
Web Reference: http://www.terrivellios.com
1 vote Thank Flag Link Wed Jun 12, 2013
In Silicon Valley there are probably too many people with enough money for a down payment and the desire to become homeowners for you to be able to buy a single condo and immediately get a positive cash flow.

If you focus on properties typically owned by investors: duplexes and other multifamily homes, properties in unfavorable locations, properties with a large nearby college or if you are willing to fix up a property you stand a better chance of getting a positive cash flow or close to a positive cash flow.

Locally a few parts of San Jose have home prices which are slow to recover and areas towards the south such as Morgan Hill, Gilroy etc. Mortgage payment to rental income should be more favorable.

South San Jose real estate statistics http://julianalee.com/san-jose/south-san-jose-statistics.htm
Alum Rock real estate statistics http://julianalee.com/san-jose/alum-rock-statistics.htm
Morgan Hill real estate statistics http://julianalee.com/morgan-hill/morgan-hill-statistics.htm
Gilroy real estate statistics http://julianalee.com/gilroy/gilroy-statistics.htm

Prior to the economic downturn many Silicon Valley residents were investing in real estate near Sacramento because the mortgage payment to rental income was much more favorable than locally. The high ratio of investment vs. homeowner is probably why that area was hit so hard by the downturn.

Juliana Lee
Top 2 agent nationwide at Keller Williams Realty, the nations largest
Cell 650-857-1000

Over 20 years experience
Over 1,000 homes sold in Santa Clara and San Mateo Counties
.
Web Reference: http://julianalee.com
0 votes Thank Flag Link Wed Jun 19, 2013
Hi

I agree with Terri response but also the school district and test scores should be review to see where the highest scores are. Depending how you finance and the rate of return you want on your investment.How long are you planning top hold the investment should also be in your thinking on where to buy. Also in consideration are you going to self manage and how are you going to pick your tenants.
RicharD Matusich Realtor DRE#00358728.

Richard G.Matusich and Associates Realtors inc,
2940 Union Ave #B
San Jose,Ca.95124
1-408-371-0700
1-408-371-7393 fax
1-408-489-0700 cell

44 Years in the Real Estate Business with offices in san njose, Aptos and Pleasanton
0 votes Thank Flag Link Wed Jun 12, 2013
It depends on what your goals are. As an investor, Are you looking for monthly cash flow? Are you looking for equity return? Your budget and down payment will play a big role in deciding on what areas to invest. Once an agent knows your budget, it will much easier to give you ideas on areas.
0 votes Thank Flag Link Wed Jun 12, 2013
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