Home Buying in 94087>Question Details

John, Home Buyer in Mountain View, CA

Seek advices on investment properties

Asked by John, Mountain View, CA Sun Jun 15, 2008

I'd like to consider SFH, TH, or Apartment building, prefer in Sunnyvale or Mountain View, but open to other cities too. I'd appreciate any suggestions and recommendations. Thanks so much.

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3
John,
Do you calculate your numbers?
How much is down payment?& how much is monthly payment? What is the cost to pay for the monthly payment, utilities, repairs and vacancy rate. How long you are going to keep it? Can you break it even?
Do you need any tax advantage? or do you need to positive cash flow to support your life style?
I will keep under 4 units to begin with. To buy a single family home as a investment is very good idea because there are a lot of bank own properties are there. It is easy to rent and it will appreciate also.
0 votes Thank Flag Link Tue Jul 1, 2008
John,

If you are buying real estate strickly as an investment, I would buy out of state. You're not going to get any reasonable return and your down payment will need to be huge. What will be the opportunity costs of the down payment needed to buy a small apartment complex?. If you are buying to live in and then sell in a few years (hoping that appreciation kicks in and take advantage of the 250/500k tax benefits) then I would look to a single family home or condo/townhome in teh best area you can comfortably afford.

Why are you looking into real estate as an investment? What other types of investments do you have in your portfolio? Have you discussed this with your tax advisor (they should be heavily involved in helping you determine what is the best investment vehicle given your situation). If you need specific help regarding properties, the real estate world can help. However, if you need help in determining the best type of investment, I would speak with your trusted tax advisor.
0 votes Thank Flag Link Thu Jun 19, 2008
As a rule of thumb, I advise against investing in single family homes of any type if you are looking to make money on monthly cash flow. In most markets houses, condos, townhouses usually make less of a return on equity than a 12 month CD, without the safety of principal. The profit from this type of property comes from either flipping (changing the property to dramatically increase value and then selling it) or holding it for a long time (appreciation). Single family properties in vacation markets (eg Hawaii beachfront) are a special case. Apartments, mixed use properties, office buidlings and land leases tend to provide better monthly income while also appreciating. If you have a lot of cash to put down and intend to hold on to the property for 10+ years, you may consider single family, otherwise, I recommend you look into multifamily and commercial properties. Check out our web site for more info.
John
0 votes Thank Flag Link Sun Jun 15, 2008
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