Study Confirms San Diego Fairs Poorly For Wealth Building (San Jose: leases, health insurance)

[someguy10]

Originally Posted by sdurbanite

Just because SD isn't a headquarters city doesn't mean people aren't getting paid well.

This link is a couple years old but Census data shows that San Diego has the 5th highest percentage of people with salaries over $150,000. The usual suspects top the list...SF,SJ, DC and Seattle

The 33 richest cities in the United States | WGN-TV

Unless I missed it there isn't much info about their method. Is this households reporting income greater than $150K or individuals?

And, more importantly, there is a distinction between (high) income and (high) wealth. Someone with a $10mm portfolio could very easily be drawing an income of $300K/year and not working a minute. That could be a software engineer who got in fairly early in a SF startup and cashed out and retired somewhere cheaper (SD). Point being, the numbers above indicate there is a fair amount of wealth in SD but it doesn't tell us if it was earned there or brought there.

[someguy10]

Originally Posted by GuyInSD

methinks there's something wrong with that algorithm.

By that reckoning, my first rental should have started renting out at $5560/month in 2002 (equivalent to $8862/month today) in order for me to actually make any money on it.

Guaranteed, a 3 bedroom 2 bath townhouse near UTC wasn't renting for that much then, or now - and yet I've somehow managed to make significant $ on it, and I'd hazard a guess that other landlords in the area have as well with their properties (we're not doing this for charity), while charging about as much as I do for rent.

We're talking about true cash flowing properties after all expenses (including non-regular capex) are properly accounted for. I strongly suspect that many landlords in SD are technically losing money on a cash flow basis but are counting on long-term appreciation (speculation) to more than offset the negative cash flow.

Admittedly 2% is on the safe side but it's still a very good starting point. I was able to get in the high 1% range (like 1.6-1.7%).

[1AngryTaxPayer]

All of my long term neighbors bought SFH 15-30 years ago for around 100-180K and have regular jobs. Some of us will be able to retire here and some of us won't but one thing for certain is you can cash out and live about anywhere else. I know I could rent my place here and still live somewhere else and never work again. I like that idea.

[NYSD1995]

My neighbors on all sides bought their homes for 100k in the 80's. None of them could ever buy those houses today given their very modest levels of career achievement. I'm talking single income families where no one ever made over 75k. I would trade my iphone, new car and high-flying career in a second if I could have the simple, low stress life they had.

[hitman619]

Originally Posted by 1AngryTaxPayer

All of my long term neighbors bought SFH 15-30 years ago for around 100-180K and have regular jobs. Some of us will be able to retire here and some of us won't but one thing for certain is you can cash out and live about anywhere else. I know I could rent my place here and still live somewhere else and never work again. I like that idea.

That seems to be case for all my neighbors in La Mesa.
Most of my neighbors are either in there 80's, or mom and dad passed the house down to the kids and now the kids own it.
I have one neighbor that owns 3 rental Properties on my block(remember my thread about the famliy with 7 cars)
The guy is pretty slick. He bought all 3 properties between the late 80's and early 90's.
He would wait till owners have passed, and then offer the siblings below market cash offers.

Originally Posted by Sassberto

My neighbors on all sides bought their homes for 100k in the 80's. None of them could ever buy those houses today given their very modest levels of career achievement. I'm talking single income families where no one ever made over 75k. I would trade my iphone, new car and high-flying career in a second if I could have the simple, low stress life they had.

So True!
One of my Neighbors inherited his house from his mom. The guy has a hot wife, grown kids and just works odd jobs and skates thru life.
I so want to be that guy
Hopefully when i am dead and gone from working myself to death, my 2 boys can enjoy that type of life.

[1AngryTaxPayer]

Originally Posted by hitman619

That seems to be case for all my neighbors in La Mesa.
Most of my neighbors are either in there 80's, or mom and dad passed the house down to the kids and now the kids own it.
I have one neighbor that owns 3 rental Properties on my block(remember my thread about the famliy with 7 cars)
The guy is pretty slick. He bought all 3 properties between the late 80's and early 90's.
He would wait till owners have passed, and then offer the siblings below market cash offers.

So True!
One of my Neighbors inherited his house from his mom. The guy has a hot wife, grown kids and just works odd jobs and skates thru life.
I so want to be that guy
Hopefully when i am dead and gone from working myself to death, my 2 boys can enjoy that type of life.

But, that's what a lot of people on here complain about. That it's not "fair" that someone inherited their place. It's not "fair" that lil old ladies are rattling around in these big houses when young families are crammed into apartments. Someone sure as hell earned it That someone is people like you, me and Sass.

[hitman619]

Originally Posted by 1AngryTaxPayer

But, that's what a lot of people on here complain about. That it's not "fair" that someone inherited their place. It's not "fair" that lil old ladies are rattling around in these big houses when young families are crammed into apartments. Someone sure as hell earned it That someone is people like you, me and Sass.

Snowflakes

[eastcoastbias]

Originally Posted by 1AngryTaxPayer

But, that's what a lot of people on here complain about. That it's not "fair" that someone inherited their place. It's not "fair" that lil old ladies are rattling around in these big houses when young families are crammed into apartments. Someone sure as hell earned it That someone is people like you, me and Sass.

I think it's great that some folks made sound investments decades ago. I think it's very fair that they prosper.

There is also a segment of this group that collects a check each month and does little else to modernize and upkeep the property. From a maintence standpoint, There are a growing number of folks that complain about HOAs but it is matter of keeping some folks in check and preserving value. There is a part of population that owns a home or homes and they care very little about the upkeep.

Many people here may own a home next to a rental with families moving in and out each year and very little done throughout the years to make the house/neighborhood more desirable.

Truth is There are some folks that inherit Landlord duties and can't manage landlord duties.

[NYSD1995]

Yeah I am not too worried about what's fair and who has what. But I agree with eastcoastbias a lot of this category can't maintain their property or overload the property with deadbeats. A lot of folks in SD who would be better off in a 1BR apartment are living in 2500sf homes that they can't manage. Several on my block - I would say at least 10% of homes fit in to that category in one way or another.

[Ultrarunner]

Originally Posted by Sassberto

So what we're basically saying is that the only way to build wealth in SD is to be a landlord - I actually completely agree with this. Most people will never make enough money to build wealth here, and even if you bought high you will end up ahead, it just may take longer. I've never imagined SD as a place you move to build wealth, it's place where the already wealthy move to so they can have a nice life.

Problem is not everyone wants to be a professional landlord, and the assumption is, if you're managing property, that's sacrificing somewhere else, i.e. your career. I don't have the desire to spend all my free time to manage and maintain an additional property on top of my demanding job, 2 kids, working spouse etc. I placed all my bets on my career and kept my cost basis of life low even when my income went up, but I'm in a big minority in that regard.

I always like to say, most people's biggest accomplishment from living in San Diego will be... living in San Diego.

My first real job in High School was working for a specialty auto restoration and parts business... lots of people would come in who were well off... most owned businesses but some had jobs like Airline Captains, Judges, etc...

I was eager to learn and just about all said get into Real Estate as soon as you can... one of the guys owned a TV shop that did repairs... he bought the building years ago and said the TV business provided a good living but the building provided wealth and freedom... when he retired he leased the space in San Francisco and was making more money than ever without having to deal with the day to day of business.

Same for the contractors, clothing store owners etc... just about all owned their properties.

Make no mistake residential rentals is a job and calls can and do come in any time day or night or day of the week.

Slowly been transitioning into commercial NNN leases and love it.