This is for discussion purpose
Assume you have all cash and you want to buy one of the homes, which will you buy for rental and hold for 10 years or more?
Your ultimate aim is to put your money in one of the houses so that you stand to gain higher rate of return.
https://www.redfin.com/CA/San-Jose/3183-Williamsburg-Dr-95117/home/754959
https://www.redfin.com/CA/Milpitas/172-Selwyn-Dr-95035/home/1100800
https://www.redfin.com/CA/San-Jose/3860-Barker-Dr-95117/home/1593485
I don’t know as far as rate of return. Location-wise, I’d go Williamsburg, then Barker, then Selwyn. I like the curb appeal of Barker the best but I’ve heard that that side of San Thomas is sketchy.
JCE makes williamsburg painful unless you have a game plan to move the low rent tenants out. Barker is better from that aspect
West San Jose is always better than milpitas.
Following are the favorites and cross outs. This is how viewers like/dislike it, want to watch out.
The GRM (Gross Rent Multiplier) is 21.47 for Williamsburg , 16.40 for Barker , 16.11 for SELWYN.
Lower the GRM, higher the cash flow/investment.
When I review $/sqft, Williamsburg is $435/sqft, Barker is $366/sqft and Selwyn is $519/sqft.
With this Williamsburg goes to the Third position. Naturally on market 90 days.
In addition, Barker & SELWYN lower cost, lower property tax until hold period. But being lower cost, Selvyn may have competition too.
Now, appreciation potential matters. Based on $/sqft, Barker has better potential (in addition WSJ) than Selvyn when entire market goes up (bigger sqft).
If I have full cash, I would prefer first Barker, then Selvyn and I do not prefer Williamsburg !
All these analysis may change when we really visit the home how much work involved based on condition & competition status.
This is just for discussion purpose, sharing my thought process.
But if you are purchasing for income, smaller is better. Renters don’t really care unless it’s too small. And a larger place costs more to maintain / update (think about flooring at $/sq ft).
Buy a duplex if you are aiming for appreciation, buy a four-plex if you are aiming for income.
I would go with the one in the best condition and the lowest potential for future maintenance issues. …
Selwyn is the best bet…One story is easier to maintain and will have no issues of tenants complaining about upstairs neighbors noise…Besides is lowest grm
Still a 3.5 cap is pretty low…Appreciation is the name of the game…Still 10 caps in the exburbs.
Altough prime properties in Sacramento are now 4 caps…
