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Hubby (who is a couple of years away from retirement) is losing his job in a couple of weeks due to sequestration, and--except for unemployment--the only money we'll have coming in until he gets another job will be from a couple of rental properties in SoCal that we bought a few months ago under our newly-created LLC. We would like to grow the company, but under the circumstances, our money is extremely limited. We can't handle another SoCal-sized mortgage. We're in AZ for the time being, although we plan to move to SoCal. Inventory here is low and prices keep rising. Haven't been able to find any bargains ($100k or under) in a decent neighborhood. There was no problem with finding those homes in the Phoenix area even a few months ago because we were hit so badly by the recession, but we bought in Orange and San Diego Counties because that's where we'll likely end up. We've never flipped (although we'd hope to in the future), so that would be out. We're looking for a steady monthly income.
I'm open to suggestions for any part of the country, but they've got to be in decent areas in which houses/condos are rented in a month or less.
Thanks.
I'm not sure what you are asking. Are you looking for houses in So Cal for 100k? Not happening. Are you planning on moving to so cal to do what? Live here off the income generated by the properties?
Hubby plans to get his RE license and work here before we move. Our son and grandchildren live in SoCal. Laguna's been like a second home to us since the mid-'70s. We'd always intended on moving somewhere in the area.
For our next investment, we would be paying cash. We could go higher ($150k-perhaps $250k), but this will be a transitional year for us, so we need to be cautious right now. Hubby has finished RE school and will be getting his license. We'll be adding Social Security into the mix in a couple of years.
Home prices have sharply risen both in AZ and CA, and in our part of the country, will continue to do so. Our realtor in OC has told us that houses are fairly inexpensive, yet renting very well in the high desert areas of SoCal. I've read there are still houses to be had for under $150k in Memphis, Akron, and some states in the Midwest. You can still find them in Phoenix and probably in Vegas. (In fact, we live in one that would sell pretty close to $100k: 4 bd./1 1/2 ba., block construction, all-electric, fireplace, and on huge cul-de-sac. Move it elsewhere, and the worth would skyrocket.)
Since this forum covers the length of the country, I thought I'd check on other areas.
Cheap houses in places like Akron & Memphis also come with cheap rents. Certainly you're not going to find CA rents.
Research carefully. Figure out what your city utilities are going to cost you out of that rental income per month. How would these properties be managed ? You can't do if from the other side of the country. That means a property manager and also a potential yearly rent loss as tenants come and go.
Do a search on Zillow, Trulia, etc. to see what you get for $ 100-150,000. Than do a comparative search to see what such a home would rent for. When you take out taxes, insurance, utilities, maintenance, repairs, manager fees, etc.there may not be as much as you hope for left over in those cheap markets.
Then talk to a good financial planner and try to guesstimate what you could earn on $ 100,000-$150,000 per year. Remember all real estate is local. Most markets are not going up. Cheap markets are cheap for a reason.
willow wind...
We've done all that. We're already in business. We've already got a couple of rental properties in SoCal, and we live in a neighboring state. I was just trying to see if anyone's got their ear to the ground and is catching something I hadn't.
The question is a little vague. Anything 40 minutes from cities like LA, Irvine, SD will rent within a month if priced correctly. After expenses, how much do you want to next ever month when you buy your next rental for $200,000 in cash? It also sounds like you have money coming in from your other two properties in socal are those cash flow positive? Are you trying to find something in line with those returns or trying to find something totally different? Condos in my complex sell for 200k and rent for $1000-$1300 a month. At the peak they were selling for over $300,00k I bought 13 years ago for $50k. Hindsight is 20/20.
$100,000 in Southern California? Maybe an old mobile home in Hemet. Don't expect to get quality tenants in that place.
Texas is supposed to give good rental returns in proportion to the price of a house. I know a few people who are happy investing in that area. Big plus, the landlord tenant laws are fair to the landlord, unlike many cities in Southern California.
I always recommend that people have their rentals within a couple of miles of their own house. That makes them easy to watch and take care of.
I'd be really surprised if you can find anything to buy in Laguna for under $250,000.
I don't recommend condos because it is just about impossible to make tenants adhere to association rules and there can be fines for the owner if tenants break the rules.
My husband used to be in the Marine Corps and we just relocated in December last year from Jacksonville, NC which is located right next to Camp Lejeune, the largest Marine Corps installation on the East Coast.
Although I hated and despised Jacksonville NC with a passion (it has to be one of the ugliest excuses for a city on the face of the earth) there is definitely money to be made from a rental point of view, if you buy the right house in the right area. There isn't enough housing on base (and there never will be) so the vast majority of married military and civilian contractors live out in town.
Obviously, by renting to military you would be faced with certain challenges- for instance, if a Marine deploys or gets PCSd (moved) elsewhere, he/she can break his lease without penalty. However, even with the downsizing of the military, there are always Marines and Navy personnel being transferred to Lejeune. Other challenges however (that I observed in my 4+ years there) include the fact that due to the younger age of most of the families (Jacksonville is statistically the 'youngest' city in the U.S.- the average age is 24), there is more wear and tear on the houses.
However, the houses are affordable to buy, and rent for a reasonable price tag.
For instance, if you google 413 Scotsdale Dr Jacksonville NC, that house is on the market for $150,000 and a house of that size in that area (Country Club is one of the better, more established areas of Jacksonville) will generate about $1400-$1500 in rent, and probably rent easily. 209 Cypress Bay Dr, Jacksonville NC in Carolina Forest is another good one that would probably rent for $1400-$1500 without a problem and has a very reasonable price tag of $139,000.
In my experience, most young military families want:
-Newer houses in the newer subdivisions- or at least updated (PM me for details on which they are if you're interested, some are much more highly desirable than others and if you don't know the area you may be led astray by an overly zealous realtor)
-Easy commuting distance to Camp Lejeune and convenient access to Western Blvd and amenities
Things like being close to (Jacksonville's excuse for) downtown, public transport, etc, in my experience are non-issues in a place like Jacksonville.
One thing that will be higher however is insurance- Jacksonville NC is near the coast and very low lying and home owners insurance runs fairly high. It might be worth checking out, even though the logistics of being a landlord from the opposite side of the country may be a bit tricky! I can also recommend a good property company however that I had good experiences with while leaving there.
if you want cashflow, the rust belt cities are your best bet. I worked on a deal yesterday that sold for 139k and will easily rent for 2200 in the oakland (University of Pittsburgh) area of pittsburgh.
appreciation is not great in these areas, but for a monthly income, its hard to beat.
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