hi folks, my husband and I live in San Francisco and are interested in purchasing a condo in San Diego for investment/rental purposes.

Asked by Jasmyne, San Diego, CA Thu Mar 15, 2012

What are good areas to look into that has high rental demand and will where housing value will appreciate in the next 7-10 years? Our budget is $200-250k...1 or 2 bedroom built after 2000

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23
Janet McCart…, Agent, San Diego, CA
Sun Mar 18, 2012
One of the problems with condos is the HOA which can take a big bite out of your rental revenue. Many condos are difficult to loan on because of HOA problems too so you need to be careful. I recommend looking in Mission Valley, college areas - SDSU, CSUSM, UCSD, and Escondido. Mission Valleys central location makes it a great choice, the college areas always have a demand for rentals and Escondido ( in certain areas) cost less and will give you an immediate rental income.
I can run a rental analysis and a investment analysis to help you know how strong the investment is for you.
Newer is a better choice because renters prefer upgraded units.
1 vote
Chad Basinger, Agent, San Diego, CA
Fri Mar 16, 2012
Hello,

Please make sure that you work with someone who doesn't just think that a property/area is a good investment. Make sure they actually show you hard numbers to back up that claim. For example, take a hard look at Gross Rent Multipliers, Cap Rates, Cash on Cash Returns, et.al. There are a slew of factors to consider and remember that the numbers don't lie (of course, they are open to interpretation and it's vital that you have someone who can help you extrapolate what all the numbers mean.)


Chad Basinger , REALTOR®, CPA, CFP®
858-997-3704
chad@chadbasinger.com
1 vote
Mark Hobsche…, Agent, San Diego, CA
Thu Mar 15, 2012
Since you are not in San Diego, my recommendation for you is to focus first on the agent you team with on your search. There are very few REALTORs who truly understand investors true needs and goals, even less who are investors themselves. I would recommend that whomever you select, they that be investors; all of us have MLS access and can find properties.

Good luck in your search, there are many great opportunities here in San Diego. As far as properties to consider, my recommendation for you would be that unless you would like to use the condo for visits to San Diego yourself, our best rental properties are single family homes where you control the entire property; not subject to the tyranny of the untrained board of most condo's HOAs.

There are many strong cash flowing areas of San Diego metro where single family homes that can be had for $250k or less (Escondido, Oceanside in the north, El Cajon in the east, Spring Valley, Encanto, Chula Vista in the South Bay) all that will cash flow, all that will appreciate, all older than 2000, though, but that part is manageable.

Mark Hobscheid
Broker/Owner
RE/MAX Solutions
Owner of 17 single family homes
Partner in 488 apartment units
Flipper of 50+ San Diego single family homes in the last 3 years
Mark.Hobscheid@gmail.com
858-254-6275
CA DRE #01835391
http://www.CallCaliforniaHome.com
1 vote
This is excellent advice
Flag Fri Mar 16, 2012
Rene' De Bla…, , San Diego, CA
Thu Mar 22, 2012
Jasmyne,

Have you considered a HOMEPATH property? http://www.homepath.com The best part of a HOMEPATH home is you can put as little as 10% down, AND there is NO mortgage insurance.

Kinecta Federal Credit Union (a not-for-profit direct lender) is one of few HOMEPATH lenders in the country, with a presence in San Diego County.

Rene Joseph De Blanco
http://www.kinecta.org/jdeblanco
jdeblanco@kinecta.org
619-301-3185
Web Reference:  http://www.homepath.com
0 votes
American Her…, , San Diego, CA
Wed Mar 21, 2012
Janet has some wise advice about HOA's. In addition to the current dues, they often go up substantially as the buildings age and capital improvements are necessary. If you are considering a particular condo I suggest driving through the development to see how well it is being maintained. I once saw a development where the community pool was drained and filled with pool furniture....not a good sign! If you see torn up landscaping, overgrown trees, and deteriorating building exteriors it may be a sign that the HOA is not being managed well.
The college areas do have demand from the college crowd which with proper screening can be great tenants. Just be aware that you have to have the leases expire at the right time based on when the semester begins in order to avoid extended vacancy. For instance, if the fall semester starts in August then you would want a lease to expire around the July time frame. If you have a tenant who moved out in February, the demand will be much lower and more difficult to rent.

Newer is also better so you don't have to deal with the pre-1978 lead paint rules....they are rather tedious and can be expensive.
0 votes
American Her…, , San Diego, CA
Wed Mar 21, 2012
I've been in property management since 1988 and I have seen ups and downs in the many different communities of San Diego. In my experience, the most stable community has been Mira Mesa (92126).

I do not handle sales so I can't speak to the cost and appreciation expectation, but I can speak to "rentability" and Mira Mesa is my pick.

My perspective is being able to find quality tenants in a reasonable amount of time in an area that supports reasonable rents and has a steady inflow of tenants. Sorrento Valley (Qualcomm) and Mira Mar are both a huge source of tenants in this area.

Be careful about finding the lowest price communities. Many of these are more challenging from the perspective of locating quality tenants, or may have higher eviction rates.

You are welcome to contact me and I will give you my perspective on other ares. For instance, Sabre Springs, Penasquitos, Scripps Ranch, and Tierrasanta are also quality areas.

Good luck with your search!
0 votes
Bill Hays, Agent, Cardiff, AL
Sun Mar 18, 2012
I think Janet nailed location as there are several good complexes to choose from like River Colony and Lido and because of its central location, easy trolley access, shopping, and proximity to Mission, Ocean, and Pacific Beach, its a winner. For the 20-35 year old crowd, Mission Valley is the place to be and you will not have trouble renting it.

She is also right about HOAs fees being crazy high.

Chad hit a key element and that is work to find a realtor that you can trust and that you feel comfortable with. As an investor, I know how it feels to go into a place and have to rely on what I am being told - so being sure you are working with someone who knows what they are talking about and is honest with you. It's harder to come by than you might think.

I represent buyers and sellers throughout Southern California because in my real estate practice, I don't sell real estate, I advocate and represent my clients best interests. And the interesting twist is that instead of buying bus stop bench ads all over town, I contribute money to your closing costs. If you are looking for representation instead of slick sales, you need to call. Otherwise best of luck with your investment.

Lastly,1 bedroom is a bad idea because the resale market is hugely limited and they appreciate less quickly. The people I know who got talked in to 1 bedroom places back in the mid-2000's are majorly stuck

BeachBrokerBill
(760) 525-8698
bill@coastalhomesofsandiego.com
CA DRE 01775528
0 votes
Joyce Du Jour, Agent, Poway, CA
Sun Mar 18, 2012
buying near the beach ot near schools is your best bet.

let me know when you are ready to start looking
0 votes
In principle, I agree but a $200-250k budget = Oceanside or Imperial Beach. Yikes!
Flag Sun Mar 18, 2012
John Arendsen, Agent, Leucadia, CA
Fri Mar 16, 2012
Wow!! How does one compete with this response? Is it that there are a whole lot of choices in the SD market? Or is there just a whole lot of real hungry RE professionals looking for a deal? Either way it's a WIN WIN. We'd be happy to chime in. Feel free to give us a call anytime at 760 815-6977. Or email me at onthelevel@cox.net.
0 votes
You compete by posting your answer twice!!!
Flag Sun Mar 18, 2012
John Arendsen, Agent, Leucadia, CA
Fri Mar 16, 2012
Wow!! How does one compete with this response? Is it that there are a whole lot of choices in the SD market? Or is there just a whole lot of real hungry RE professionals looking for a deal? Either way it's a WIN WIN. We'd be happy to chime in. Feel free to give us a call anytime at 760 815-6977. Or email me at onthelevel@cox.net.
0 votes
Cheryl Smith, Agent, San Diego, CA
Fri Mar 16, 2012
There are several locations that your budget will fit. My local area is University City. This is a growing community with HUGE rental potential. UTC is the next largest business area to downtown, with multiple industries located around there, plus the highly renowned top University UCSD, where there are plenty of opportunities for renters. The advantage of this over Downtown is that the HOAs (which bleed profits) are much lower than Downtown San Diego. A 2 bed 2 bath can go for between $220,000 and $250,000 with HOAs of around $300 / month. These will be located within walking distance or a short car ride to shopping malls, grocery stores, Universities, schools, and businesses. There is plenty of industry including Qualcomm, and a HUGE biotech industry from start up businesses from UCSD, to big Pharmaceutical companies, Pfizer, and Novartis to name two.

The MOST important thing is to find a very knowledgeable agent who will go the extra mile for you. in this season of multiple offers on investment properties, lenders being more cautious, many investors with all cash, your agent will have to be very committed to working with you the whole way through.
0 votes
Michael Cheng, Agent, San Jose, CA
Fri Mar 16, 2012
While you can probably find an investment realtor in San Diego, have you considered the extra costs of managing a property remotely? Those costs generally cut about 12-18% from your rental income as compared to buying a property locally. So, unless you also plan to live in that condo later, then you'll have to look closely at comparable returns.
0 votes
Chris Gorno, Agent, Carlsbad, CA
Thu Mar 15, 2012
I see that you have gotten many great responses! Do you have plans to keep the property rented or will you use it for personal use as well...if so you may want to purchase near your favorite beaches, shopping, restaurants etc. If you just want this to be strictly an investment rental, you may want to either be near the Universities, Military Bases or right in the heart of everything wonderful about San Diego. You, by the way have a Fantastic city yourself!! A great agent will help direct you to a gem of a property once a little more information is revealed. For example: the condo market took such a hit (in almost every city) that some complexes with low owner occupancy or a large number of delinquent HOA dues from homeowners, prevent financing for investment properties because a condo certificate is required for loan approval.It's best to work with a knowledgeable Agent who can connect you with a Local Lender that knows our local condo market. If you are a cash buyer your options increase dramatically. Interview a couple of agents and find a good fit for your own style and someone who is sincere about helping you achieve your goals. We would all be happy to help you!

Chris Gorno
#01499885
Windermere SoCAL
(619)788-4345
0 votes
Maria Weiss, Agent, Naples, FL
Thu Mar 15, 2012
There are several high rental demand areas in San Diego. Some of them being the areas that surround the larger Universities here - USD, UCSD and SDSU. The coastal communities such as Carlsbad and Oceanside offer properties in that price range that are also located in areas that has good rental demand. I would not venture to comment on appreciation in the 7 to 10 years. One of the current great tax advantages for investment real estate is a 1031 exchange. This may allow for tax deferred treatment at the time of a sale. There are many rules regarding a 1031, but it can be very attractive for investors.

I work with investors all over the county and am quite knowledgeable regarding ROI (return on investment anlaysis). I hope this information has been helpful.

Maria Weiss, Realtor, MBA
Prudential CA Realty
3790 Via de la Valle #201
Del Mar, CA 92014
858-248-0863
maria@mariaweiss.com
Web Reference:  http://www.mariaweiss.com
0 votes
David Inderm…, Agent, San Diego, CA
Thu Mar 15, 2012
Hi There,
From my 14 years of experience the Coastal Communities has the highest rental demand. As an investor you can take advantage of the Summer Vacation Rentals where the HOA allows that. Typically, you can rent weekly what you get in rent for the month. The season starts from June-August for weekly and September thru May for Student or Corporate 9 Months. Depending on the location of the property in proximity to the Beach or Bay will determine the amount etc...

For Example in Pacific Beach you have a few to choose from currently on the Market:

{3764 Bayside Ln # 1 1 Br 1 Ba 9 days on Market @ $209K }

{1024 Loring St # 2 1Br 1Ba 14 days on Market @ $220K that rents long term for $1,295}

{1740 Roosevelt Ave # F 2 Br 2Ba 9 days on Market @ $199K-$220K currently vacant}

{4015 Crown Point Dr # 108} 1 Br 1 Ba 57 days on Market REO @ $260K currently vacant}

These are not built in 2000 and are all walking distance to the Beach or Bay located in Pacific Beach 92109 which is key to maximize your ROI.

I hope this helps you with your transition. Email or Call me and I can give you a few property management companies to interview to see whom you want to hire for renting out your investment property.

Feel Free to go to my site to view more properties and learn about San Diego as I am a 3rd Generation Native San Diegan :).

David R. Indermill CDPE*
The Sterling Company
DRE#01232827
(858) 414- LIST (5478)
http://www.SanDiegoHomeStore.Com
0 votes
Ken Schwartz, Agent, San Diego, CA
Thu Mar 15, 2012
Hi,

There are a ton of factors to consider when purchasing an investment property in San Diego. I work in the property management field as well as working with buyers/sellers. I would be happy to give you my input and help you find a good property for your portfolio. Feel free to email or call me with any questions.

Thanks,
Ken Schwartz
Broker-Associate REALTOR®
DRE# 01854235
KM Realty, Inc
3530 Camino del Rio North #101
San Diego CA 92108
Cell: 858.366.3093
Fax: 888.470.5928
ken@kmrealtysd.com
0 votes
Sudi Rasekhi, Agent, San Diego, CA
Thu Mar 15, 2012
Any costal area in SD is good for investment both for future appreciation and rental revenue. for instance based on your price range areas like Carmel Valley, Carmel Mountain, Scripps Ranch, Rancho Penasquitos, Solana Beach and up to Carlsbad will give you variety of choices in terms of the size and criteria of condos within your price range. Hope this helps, let me know if you have any more questions. sudi7@hotmail.com
0 votes
Tuesday Whitt, Agent, San Diego, CA
Thu Mar 15, 2012
Hi ,

We have a couple of areas in San Diego Co. that have newer condos for sale in that price range.
The problem is many have high HOA fees also. I have a couple of questions for you, are you just wanting to break even and buy where the projected appreciation is higher ? or are you wanting to find the best area for making the numbers work ?

Would you be paying cash or financing ?

Several complexes with low owner occupied or current litigation can not get approved for financing and the prices are really low for cash buyers.

Have you considered a single family in an up and coming area ?

Fell free to give me a call if you would like to talk about your options

Tuesday Whitt
Broker-Associate
619-300-7653
TuesdayWhitt@gmail.com
0 votes
Diane Kephar…, Agent, Bend, OR
Thu Mar 15, 2012
Helllo-

I am an agent in a condo community where there are mostly investors renting out their units. This is a high rent market due to proximity to Sorrento Valley. You might be able to get a small condo around 250k. If you are around the 200k range, you will need to go further inland and north.

Happy to point out the areas and rents.

Diane Kephar, Realtor
Prudential
858-525-5402
0 votes
Erik Weichelt, Agent, San Diego, CA
Thu Mar 15, 2012
Hello,
There are several areas with newer condo's that should do well over the next 7-10 years. Recommend looking in UTC area and downtown.

Good Luck in you search and let me know if I can be of service.

Erik Weichelt
619-298-3900
0 votes
Eduardo Sanc…, , San Diego County, CA
Thu Mar 15, 2012
There are plenty of options for you inland and coastal or in between, I know many realtors that will be glad to help look for the right property, and would be happy to recomend a few.
I'm on the lending side and if you are not already Pre-Approved for the financing I can cetainly help in that area, Kinecta Federal Credit Union has many lending options and anyone can join.
Finding the right property is always easier when your Pre-Approved for the loan feel free to check out my website at http://www.kinecta.org/esanchez or call me directly; (619) -206-0959
0 votes
Sinead McAll…, Agent, Oceanside, CA
Thu Mar 15, 2012
Hi Jasmyne,
Feel free to email me or message me your emial address and I will send you a list of properties that meet your search criteria.

Thanks!
Sinead McAllister
Broker
McAllister Homes Real Estate
858-205-5215
brokermcallister@gmail.com
0 votes
David C Dibo…, Agent, San Diego, CA
Thu Mar 15, 2012
Hi. I'd love to talk to you about investment condos in San Diego. Please call or email me when you see this. My contact info is below.

Thanks,
David

David C Diboll
Nuvilla Real Estate
DRE# 01861343
San Diego, CA
http://www.nuvilla.com
ph- 858-692-2360
0 votes
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