Come on, I know that, but good pricing heals all wounds. I look at every opportunity with an open mind. You have to, in this market…
Bigger lot than usual.
For matured desirable neighborhoods, varies by a couple of % after about 6 years, no big deal. So is it more efficient to just buy 1 rather than 10? How hard is it to rent out a SFH in a matured desirable neighborhood? I bought the rental in 2011, have not experienced the downturn yet, so far no vacant time between tenants. Is it feasible to replace a SFH in a desirable neighborhood like PA, with 10 SFHs in a desirable neighborhood in East Bay?
What about net worth? Many employees in SFBA have RSUs and ESPPs Stock market keeps hitting ATHs
It’s not possible to replace a SFH in PA with 10 homes in a good part of east bay. SFH in PA costs $2.5M. East Bay costs $1.25M. So you can buy 2 east bay homes with 1 PA home.
A home in an economy neighborhood of East Bay costs $450k. So you can buy 6 homes there for the cost of 1 PA home. But still not quite 10 homes.
It comes down to cash flow: 6 cheap homes much better than 2 medium homes, which is still better than 1 expensive home.
Classic quantity vs quality and time expended dilemma…too many places spread out over wide geographic areas means needing PM or more time and resources spent to manage. Poorer areas may mean lower quality tenants and thus more hassles. Agreed, cash flow will probably be better with more places but it comes at a price. That, is why I say a good compromise is a mult unit building, one spot with good cash flow. Done!
SFHs tend to appreciate faster than multi units though. And you can always add extra rooms and remodel to the hilt with SFHs before you sell to increase your gain. Hard to do fancy stuff with multi family units.
I bought all my cheap SFHs in one county and it’s a no brainer for me to manage them all. I didn’t hire a PM either. No need for that!
Again, multi unit investing is not for everyone, agreed, but it certainly is one avenue if one doesn’t have any tax breaks and you really need the cash flow. Can’t have everything. I mean, for some of us, we are real job working stiffs and our paychecks are chomped on by Uncle Sam unless you go do something about it. RE is one way to address it and start your way to building up your financial wealth.
Has to agree with “2 houses in a mainstream neighborhood is better than 1 house in a hot neighborhood” since that is what I did in Singapore.
But not so sure about 6 houses in a questionable neighborhood (from context is not in a desirable neighborhood) than 1 house in desirable neighborhood.
The issue is not about ratio. Is about the sustainability of rent in desirability neighborhood, the risk exposure (e.g. robbery, eviction, vacancy rate) in a questionable neighborhood, other hidden costs that are omitted in the computation of cap rate and cash flow, and overall return of investment.
Don’t worry! The neighborhoods that I talked about where you can by one house for $450k are actually very decent and rentable neighborhoods. I’ve never had to deal with robbery, eviction, or vacancy. There is no hidden costs associated with them at all other than your fear of the unknown.
But I suspect your houses in Austin are probably around the same price point. So you should have the experience already dealing with houses at sub-optimal locations.
Cheaper. $220-$320. Rating of schools are at least 9/8/7 (elementary/middle/high) as displayed by Zillow, emphasis on walking distance (within 0.5 mile) to a 9/10 elementary school, access to highways (within 30 secs) and short commute to centre of employment* (within 15 minutes). *Use The Domain, Dell, Apple, Oracle and IBM.
From the discussion, many costs are ignored in the computation of cap rate and cash flow.
Current price or the price that you had purchased your house?
[quote=“wuqijun, post:392, topic:695”]
So you should have the experience already dealing with houses at sub-optimal locations.
[/quote]What is a sub-optimal location? I avoided the upscale ones such as West Lakes, Steiner Ranch and Downtown since they are almost as expensive as SV, might as well buy in SV I think article that claim Austin is over-valued, are referring to these upscale neighborhood, the median house price is like 7-10 times median income. My target neighborhood is about 3-4.
Current price. I bought them at below $300k.
Massive 5k lot means Contingent!!!
What’s the difference between contingent and pending anyway?
Here is Redfin’s explanation on what the difference is. Essentially contingent first and if all contingencies are met, goes pending. Theoretically, can go pending immediately as we have seen if all contingencies met at that time.
Wow, even a fixer on busy 19th Ave itself goes for 857K…
Wow, that is cheap!!!
But, it is on 19th Ave…you would have to give me the place for me to want to live on a freeway essentially
Who says you’re going to live there? You buy that as a rental. Some renters love the convenience of a short walk to the bus stop!
But to me, the appreciation rate will be stunted by the fact that it is on 19th Ave. I like to think ahead, ya’ know…