- Grand Rapids, Michigan
- Tampa, Florida
- San Antonio, Texas
- Las Vegas, Nevada
- Austin, Texas
- Orlando, Florida
- San Diego, California
- Dallas, Texas
Why invest in such far flung open places when you can do it right here at home? Saves time and trouble.
Chasing cap rates in far flung cities on sfhs is a fools game especially when we are headed towards a peak…Unemployment is the lowest in 10 years…The boom cycle will end…better to be in high appreciation locales than high cap locales. …Not one of the cities mentioned has growth control except San Diego…The rest will allow unfettered development, whuch means low appreciation long term…
Btw, San Diego is no bargain. My friends that moved there can’t find a decent house under $1m or $5k per month rent…
Areas with no barriers to entry tend to overbuild…will put a lid on appreciation. …
This is my opinion. You are the best person work for yourself !
Unless you run a business like REIT, it is difficult to remote control real estate investments as this physical and you need to depend on someone else, say friends or family or third party PMs. In the long run, remote control becomes expensive than local control.
Being local, you will be able to manage at better cost effective way than remote control.
As far as Texas…It is the anthesis of California. .Texans truly hate California
The obsession with California puzzles me. I play the keyboards in a blues band, and our drummer has a sticker on his kit saying “Stop Californication of Texas Music.” The mayor of Austin, Steve Adler, is a Democrat, but he recently warned that, if our city stays on its current path, “we’ll end up like San Francisco,” with out-of-control housing costs. The newspapers often feature gloating stories about the number of Californians fleeing to Texas (eight per day to Austin alone), as an indication of the vast superiority of the Texas way of life.*
Really??? If I had to live in a place like Texas I might as well go back to China.
The original question is why “better to be in high appreciation rather than high cap locales.” Long ago, investors prefer high cap but they are changing to high appreciation. Are they merely following the money? Or have no choice because you can’t find high cap.
Suzhou, Hangzhou or Shenzen?
Have you actually been to Texas?
This is a generalization…I’m from Texas, have several friends that still live in Texas and none of them hate California, granted they are all younger - I think it is more a generational thing related to politics…
No, but I haven’t been to Detroit either…
Your body will definitely adapt. I think I got it from “Thinking Fast and Slow”, it’s a fact people overestimate how climate will affect them. And then there is AC.
I am surprised to see San Diego on the list. The article claims the average house price is only 217K in San Diego? That sounds too low. Maybe @sheriff can chime in?
This is based on my understanding. Low cost and low per capita income areas are good for high caps, but have low appreciation. They are vulnerable during recession period and we are likely be stuck with property. In the long run, likely end up low overall growth (cash flow+appreciation) than high appreciation areas.
Is it worth buying 1.5M apartment property at Fresno at 10% cap level or 1.5M SFH in Mountain View?
When economy ruins, MV home can maintain value while Fresno may go down. When economy is bullish, both may go up.
I have seen this with my Cupertino home, the benefit of buying good location. The seller of my Cupertino home bought a brand new home at Morgan Hill exactly during the peak period 2004/5. The CU home is doubled now, while MH home came back to the same amount now.
There is no clear solution for this kind as individual experience may vary.
The basic question is that we have X amount of money. Which is the better location where we can buy and make max return out of the investment. It is up to individuals to decide which is better.
Only certain cities in China suitable to live in:
But of course, none of those is better than the Bay Area.
Oh my god, your seller messed up badly while you benefited from his mishap
Actually I think the 1.5M apartment building in Fresno will do better in a downturn. The Fresno buildings will likely have 10 or 15 units, and not all units will be vacant, and certainly not all at the same time. So you will have pretty stable income throughout. You can lower rent from say 700 to 650 and all is fine. You will have no problem making PITI payment.
Your 1.5M SFH in MV though is more troublesome. It will be only one set of tenants. And if their jobs got axed your house will likely sit vacant for a month or two. Remember, we are talking about a downturn. And even at the best of times rent is barely enough to make PITI. During downturn you have to lower rent and so you are bleeding cash. Because it’s recession time, your other income will also likely go down. Double whammy.
Buying a house in Mountain View is a no brainer over something in Fresno.
I don’t know where they got that figure. Even low end condos/townhouses in the worst areas are more then that. I am looking in Chula Vista and northern San Diego and the places I am looking at are about 150k lower than comparable places here.
Texans deserve all the criticism they get…Sorry someone on this forum has as a very thin skin being a millennial and a Texan…a double handicap…A lot of Texans want to secede from the union…be my guest
Sorry but a true Texan ain’t offended by nothing…Afterall you are from a state that has given us some of the worst presidents in history…LBJ and a couple of Bushes. …no apologies needed…