I am looking around to buy my first house.
I only can afford houses in South San Jose, East San Jose, Hayward ( near San Mateo-Hayward bridge).
Their schools are similar ( rank 5 -6). Just forget about my commute time to work because my plan is to buy a single family house ( 3bed and 2 bath) and rent it out.
Could you please give some advice as among South San Jose, East San Jose, Hayward ( near San Mateo bridge):
which location is easier to rent out?
which location has higher appreciation?
Which location has more safety ( in term of less crimes)?
I would say South San Jose has better schools? Where in SSJ are you looking? Near Cambrian / Almaden are very nice. Also I think there are more jobs in SJ than Hayward, but I’d look squarely at what kind of tenant pool you are looking to rent out.
I vote for south san jose. It definitely has less crime. Although I haven’t lived in the bay area for a couple of years, I think the only advantage the other two have is they are closer to employed centers.
Thanks guys for the quick response.
Hi @notabene, I cannot afford these places. I only can afford SF houses near the border between South San Jose and Ever Green. Please find the map in the attachment.
is the location I circled in the map safe?
Regarding commute time to work I heard from many people that most tech companies now are expanding their offices in the East Bay. Many startups now open in Pleasanton. Also from Hayward people can just pass the San mateo Bridge to get to San Mateo. On the other hand, it looks like to me there are not many companies interested in opening new offices in the south. I also heard from many people living in South San Jose complaining about the nightmare traffic from there to the north (on 680 , 880 etc) on rush hours. These make me concerned about the appreciation and also how easy it is to rent out a house if I buy it in South San Jose.
Thanks
If you are buying to rent, you should be looking at numbers very carefully. Make sure you have enough margin. If possible, buy at profit, which is kind of hard, if you want to sell at profit some day. What I am trying to say do not just buy at loss in a hope that you will make a profit some day. It is called speculation.
As a guideline, when analyzing a property, keep these yearly cost estimates in mind.
1 month rent for Property Management
1 month rent for vacancy factor
1 month rent for maintenance
Property Tax and Insurance (by county rate)
The above can be called rental OPEX.
Your property should come out favorable on this equation.
This is true for any rental:
+ Rents collected
- rental OPEX
- rental mortgage (P+I)
= net rental income or loss
The cash left after paying OPEX should be 1.25 times the payments to amortize loan (aka DSCR).
I do not know if any realistic rental property search will satisfy all of the above condition assuming you want to keep down payment low.
After you have made sure the numbers work in your favor, look for nice neighborhood. Good neighborhood will attract quality tenants. Quality tenants will keep your home in good condition and pay rents on time.
How hard is it to rent SFHs compared to condos/townhomes? I tend to spend way more on maintaining SFH than I used to for condos (where most maintenance is covered by HOA). If it’s purely for rental, I think condos/THs are much easier to handle.
If you’re looking for appreciation, I’m also not 100% certain SFHs are always better. For 700k, you can get 2bdrm condos in Sunnyvale / Mountain View even. Between that vs a SFH in SSJ, are we certain the SFH would appreciate more? (genuinely curious)
Your budget has to be at least 900-950K ish. 95123, 95119, 96136
Most elementary school rating is about 7 to 9. High school ratings are typ San Jose Unified rating not 10 for sure. East side has more rental. 95116, 95122, 95111, 95110 etc. They are slightly lower. Hayward is noisy since it has Bart, 680 and 880… Higher crimes.
Expect to ask $3000-3500 a month for a rental. Most want spaces for 5 cars thus most rental homes have concrete front for families to squeeze in. Expect to pay over 1.1-1.3+M for a 3/2 1300sf+ elsewhere with a SJ address. From central SJ to west or north SJ, it gets pricey since they are closer to high tech job centers. Appreciation will happen after a big decline. Home prices maxed out in spring 2018 and it is holding up still. Best area sees 1-2% appreciation 2019. Builders have overbuilt condos/apt in SJ, Mpts area offering rental perks.
Hope that helps, Sam Shueh
Milpitas along 680/880 or near Bart station they have overbuilt condos, apts. Most new unit are ~1M with a 400+ hoa due. Want an older SFH you could expect to pay 950+. Taking longer to rent out in the winter.
I talked to a realtor in Florida some time ago. He did not even want to talk about SFH. He went straight to buying Condo/TH for renting. But, in Florida, the HOA are not astronomical, like 400 per month, I guess. Condo/TH are easier to rent and easy on distant landlords.
The problem with condos is the HOA can ban rentals. Also if you have a bad tenant the HOA can sue you. Condos just add more stress and less appreciation.
not many family like living in high density housing near Milpitas great mall. After living in for a year or two, they start looking for SFH with some backyard and outdoor space to sit and see blue sky.
All the badmouthing of condos and townhouses missed the point that you are buying it as investment. You are the not going to live in it. So whether you like it or not is irrelevant.
Look at it as a business. Will condos be cheaper to maintain? Higher cap rate? Faster appreciation? Business considerations.
You only have a fixed amount of money. Buying condos vs SFH means you are trading off not just property type but also locations.
That’s only true of old buildings. In the late 90’s, building code was changed. Now there’s drywall, insulation, plywood, and air gap between each unit. You won’t hear anything.
