Average rent in San Diego County areas - California (CA) - Page 4 - City-Data Forum

mandasand · 08-30-2012, 02:54 PM

I've been doing a lot of research on SD because of a relocation taking place next year. I am struggling with the fact that I will have to get a crappy apartment because I will be living alone. Since my hubby is in the military and cannot transfer we will be apart for 6 months to a year. I haven't rented an apartment since I was 19 years old. I bought a condo at 20 and then a single family home a few years later. I live in Northern California and it's not cheap here either. But, it is approx. double the cost for a 1 bed, 1 bath apartment in SD than where I live. Of course I could always just find another job but that's not an easy thing to do either. I've been unemployed before and it was miserable, especially with a grad degree...managers don't want to hire people that have more education than they do. I am trying to look at yelp reviews for apartment complexes but wish I could find a nice homeowner that has a granny unit that is willing to rent to me at a reasonable cost. And one that will "allow" my husband and dog to visit once a month. It's amazing the demands landlords make. One Craigslist posting for a detached apartment said I could not have anyone over. Even a working professional may want to have a friend over for a glass of wine. A furnished apartment would be ideal because I honestly don't want to have to pick and choose from the stuff at our house and then have to move it all again when my hubby moves down. It's just all a little overwhelming sometimes!!

earlyretirement · 08-30-2012, 03:09 PM

Another thing to keep in mind is that unless the owners bought a long time ago when prices were much cheaper, it's not like they are being "greedy" and making tons of money.

Take an area like Carmel Valley for instance. A nice 2 bedroom / 2.5 bathroom condo that is almost move in ready you can easily spend $450,000. If it's an investment property the interest rates are higher than owning a primary residence.

At the 15 year fixed loan at 3.25% you are going to be cash flow NEGATIVE even putting down 25% down payment after property taxes and HOA fees.

At the 30 year fixed mortgage at 3.875% (which is the lowest mortgage rate for an investment property) after property taxes and HOA fees you are barely cash flow positive. (Again putting down at least a 25% down payment)

You have to also factor in that MANY owners bought during the bubble when prices were higher but especially their mortgage APR is probably much higher than today's low rates. And I'm sure many probably can't get refinanced. So their numbers are probably even worse.

So I also think that people need to keep things in perspective and not assume all the owners are greedy. The high cost of properties here and strong demand for properties will keep rental prices high here for the foreseeable future.

My wife and I started thinking about investment properties. We sent in the paperwork and got pre-approved to buy. The problem is there is almost NO inventory on the market in desirable areas.

shmoov_groovzsd · 08-30-2012, 04:24 PM

Quote:

Originally Posted by earlyretirement

Another thing to keep in mind is that unless the owners bought a long time ago when prices were much cheaper, it's not like they are being "greedy" and making tons of money.

Take an area like Carmel Valley for instance. A nice 2 bedroom / 2.5 bathroom condo that is almost move in ready you can easily spend $450,000. If it's an investment property the interest rates are higher than owning a primary residence.

At the 15 year fixed loan at 3.25% you are going to be cash flow NEGATIVE even putting down 25% down payment after property taxes and HOA fees.

At the 30 year fixed mortgage at 3.875% (which is the lowest mortgage rate for an investment property) after property taxes and HOA fees you are barely cash flow positive. (Again putting down at least a 25% down payment)

You have to also factor in that MANY owners bought during the bubble when prices were higher but especially their mortgage APR is probably much higher than today's low rates. And I'm sure many probably can't get refinanced. So their numbers are probably even worse.

So I also think that people need to keep things in perspective and not assume all the owners are greedy. The high cost of properties here and strong demand for properties will keep rental prices high here for the foreseeable future.

My wife and I started thinking about investment properties. We sent in the paperwork and got pre-approved to buy. The problem is there is almost NO inventory on the market in desirable areas.

I am pretty certain that even the most seasoned investors are watching like you are right now and seeing the same thing with inventory.

In the not so nice areas, inventory like the area I live, houses are getting flipped.

For example, price history shows bought 2 months ago (presumably at courthouse steps or REO) for 211k and sold recently for 323k and a 1 month close. Shows ok, but not great.
Like I had said in another post, these are going pretty quickly, but probably not the type of guaranteed tennant investment or return you might see in coastal areas.

I am curious because based on that price and what rents are going here, what is the actual rent calculator that is used? Zestimate for rentals?

http://www.sdlookup.com/MLS-12003689...Grove_CA_91945

earlyretirement · 08-30-2012, 04:48 PM

Yeah Shmoov..inventory definitely is horrible! Most good things hitting the market are getting scooped up right away. I remember right before we left for vacation this summer to Europe. I saw a nice property come on the market and I figured I'd check it out later. Well it sold in 4 DAYS at almost the asking price! 4 DAYS!

Wow, that example you gave the flipper did well! I'm not looking to flip anything. I look at real estate as a long term investment in nature and I never look to flip.

I have flipped before but in all those cases it was an unsolicited offer where I wasn't planning to sell and someone made an offer that was too good to pass up.

As far as rent calculators and estimates...I'm going by Zestimates from Zillow, Craigslist, the paper as well as what other experienced realtors tell me properties in any given area are going for.

However, my desire to buy a nice property isn't just as an investment. Our goal is to maybe pick up something not too far from the beach (5 minute drive by car) that can easily rent out. We'd get a 15 year mortgage because it's so cheap to finance right now.

The idea is to not only have our primary house paid off free and clear of a mortgage but also by the time I permanently retire and stop working to have another paid off place with the extra possibility that when the kids are out of high school we either downsize to and have another paid off place in San Diego.

Then we can either sell our big house and live in the smaller condo or just rent out our big house as rental demand here is very strong and I don't see that changing in 15 years.

But as far as cash flow, there isn't too much cash flow in the pricey areas. Although prices are much lower in other areas, since we might potentially downsize to it in the future it has to be desirable to a type of place we could potentially want to live in once the kids are out of the house.

PS: For people looking to get into investment properties the rates really drop once you can put down 25% vs. even 20%. Also, it looked like there is a 0.75% automatic premium you have to pay buying a condo vs. a SFH. But that 0.75% premium goes away if you put down 25%. But if you have an excellent FICO, strong salary or monthly income steam, stable work history and the 25% down payment then the rates are great compared to years ago. Best rate now seems to be 3.875% for a 30 year fixed and 3.25% for 15 year fixed with 25% down.

Clevelandgal · 08-30-2012, 11:01 PM

We got 3.7% 20 year fixed ( of course).
only 10% down. Lots of financing options out there

earlyretirement · 08-30-2012, 11:07 PM

Quote:

Originally Posted by Clevelandgal

We got 3.7% 20 year fixed ( of course).
only 10% down. Lots of financing options out there

Clevelandgal I know you said you already owned a house i think in Cleveland. I'm curious, did you have to buy this second property here as an "investment property" even though it's really your primary property now? I was curious how that worked as I heard about a few people stuck with another house after moving that turned into a rental property after they moved.

There were a few options including pulling equity out of our primary house via a refinance at 3.5% but I opted to pass on that option.

Clevelandgal · 08-30-2012, 11:16 PM

No we called the property here our primary residence (which it is) and considered the former place a rental (which it now is). Needless to say, our lender would not count our rental income as income on our application (even though we claimed income on our tax return!) so we had to qualify for the new loan on top of having the mortgage obligation on the other home. Thankfully we have no other debt, so this was possible.

earlyretirement · 08-30-2012, 11:58 PM

Ah. Ok thanks for sharing. That's good to know they did it like that since it is your primary. Yeah I think for the lender to count the income from the rental you have to have a few years rental history as a landlord? Rules seem to differ from lender to lender. But it sounds much easier financing a primary vs. investment property.

Great about the no debt! That's the best way to live. Congrats again on the new place.