What is the Vallejo Rental Market like? Is it a good time to be a landlord in Vallejo, CA now?

Asked by Rover. Humphrey, Sacramento, CA Tue Mar 24, 2009

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Voices Member, , Benton County, OR
Tue Mar 24, 2009
Tony, Hope this helps....http://www.zilpy.com/US/California/Solano_County/Vallejo/

This is a handy tool also......http://www.rentometer.com/

Good luck, Dunes
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Herman Rod, Agent, Benicia, CA
Tue Mar 24, 2009
Hi Tony,

First of all thanks for your inquiry.Right now, the investment market for Vallejo is very hot, particularly in the $300,000-and-below price range. I've published a number of recent statistical reports on our web site, which may help you get a feel for the median price, inventory, sales activity, so feel free to check them out at HomeSection.com.

In that $300,000-and-below price range, those homes that are in the best condition are typically getting multiple offers with heavy activity from investors and first-time buyers. Many of those are getting bid up above the asking price and quite a few of the offers are cash deals. The majority of the homes on the market in Vallejo right now are distressed properties; almost 9 out of every 10 active listings are either an REO (foreclosure) or short sale listing.

With a median price of about $135,000 as of February, there are many homes in Vallejo which as a rental pencil out beautifully in terms of cash-flow. And, since the market will eventually rebound, buying at today's low prices offers an excellent potential for future appreciation (many of the homes now selling in the mid-$100,000s were selling for $400,000+ just a few years ago). Of course, as they always say on Wall Street "past performance does not guarantee future results." Nevertheless, most investors expect excellent appreciation once the market recovers.

Unfortunately, unlike our multiple listing service, which offers immediate information on virtually every home that's listed and sold, there really isn't a similar database for rental properties. Most rentals are either represented directly by the landlord/investor or by a property management company. And each landlord or property manager is really only familiar with those rentals that they manage. So rather than getting a comprehensive industry-wide view, property managers sometimes get a slightly skewed view of things, which is based largely on the activity they're having with their own rentals.

Based on the most recent conversations I've had with these various property managers, the rental market has softened a bit over the past few months, probably due to the high number of investors who have purchased these low-priced homes. So rental prices have come down a bit. Rent costs are very sensitive to supply and demand and as the supply of rentals has increased, the cost has softened slightly.

Many of those who have lost their homes to foreclosure have become renters, so that has helped increase the demand. But over the past month, there have been around 50 new pending sales in Vallejo each week and many of those are investor purchases. So it just follows that if 100+ new rentals hit the market each month, prospective tenants can be more selective. Thus, in order to minimize the vacancy period, most landlords are adjusting the rental cost to entice those looking to rent.

Then too, there have been various foreclosure moratoria in place essentially since Thanksgiving which has allowed those who otherwise would have been forced to move to remain in their soon-to-be-foreclosed homes. Those moratoria should be lifted by the end of this month, so we could see a flood of new prospective renters in the coming months.

For our investor clients, I always find it helpful to sit down and go over all the variables to make sure you've analyzed the entire RE investment picture and to help you decide which property types, price ranges are going to provide the best opportunity for you to accomplish your investment goals. If you'd like to get together, please contact me either by phone (707-747-6600) or via email from either my Trulia Profile or our web site ( http://HomeSection.com/contact ).

Once again, thanks for your inquiry. I look forward to hearing from you and to hopefully assisting you and guiding you through this process.

- Rod Herman
Web Reference:  http://HomeSection.com
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