Why San Diego is one of the best place to buy Investment Property

7 Reasons Why San Diego Is one of the best place to buy Investment Property

1. Rentability

It is a great time to be a landlord but horrible time if you a looking to rent in San Diego. Vacancies are at the low rate of 4.1 percent for San Diego County. If your rental property is in fairly good condition and priced right, you will get multiple applications.

2. Rising Rents

According to an analysis of rental prices of single family homes by real estate data provider RentRange, San Diego ranked the 10th place where rent is growing the fastest. Rents in San Diego increased 13.6% between the third quarter of 2014 and the third quarter of 2015. The San Diego County Apartment Association reported even higher rent increase, 20% up over a year ago, 44.6% up from 2005.
Rental prices nationally have grown at roughly twice the pace of average hourly wage growth, which was a paltry 2.1 percent over the past year. Rising Rents means better cash flow.

3. Rising Property Value

San Diego County home prices rose 0.6 percent between August and September, and are up 6.6 percent since September 2014, according to the Standard & Poor’s Case-Shiller Home Prices Indices. The monthly rise was one of the fastest among 20 large real estate markets included in the indices, while the annual climb ranked seventh. The indices were created by taking the cost of housing in each market in January 2000, assigning them a value of 100, and tracking the subsequent rise and fall. San Diego’s mark in September was 216.62, reflecting more than a doubling of home prices in nearly 16 years. The rate of increase is the nation’s second fastestbehind Los Angeles.

4. Population Growth

Population growth is a significant factor in the rising demand. The county’s population grew by an average of nearly 33,000 people annually over the past two years, according to the San Diego Association of Governments estimates. Some of this is natural growth — more births than deaths — while some of it is probably also driven by new employment opportunities that have attracted new residents from out of town. The California Department of Finance predicted that San Diego County’s population will grow by 31 percent to hit 4.07 million people by 2060 (. Due to the lack of available land to develop, I do not see the kind of overbuilding that is expected in several other same-size metropolitan markets.

5. Short-term Vacation Rental Opportunities

With over 12,000 short term vacation rentals in the area, San Diego is rapidly becoming the fastest growing market in the country. According to Pillow, Short-term Vacation Rental Investors could be earning thousands more from their rental property. One beach community short term average rent is $4896, compared with only $1761 for long term rents. However, cities and communities in San Diego County have passed or will attempt to enforce restrictions on short-term rentals. If you are a Short-term Vacation Rental Investor, you have to pay attention to new regulations.

6. Out-of-town Investor Friendly

One of investors we know could not resist to purchase a Fixer house out side of California because it was so cheap. He thought he could fix and flip it. It was an online auction, he did not have time to visit so bought it without seeing it. It turns out that this house is in the very high crime area. It is so high that no contractor or real estate agents would go there. In San Diego, we do have some areas that have higher crime rates than the others but not to this extent. We always advise you to get know the area before purchasing but not having too high crime area makes San Diego out-of-town investor friendly.

7. Climate

San Diego has on average 146 sunny days and 117 partly cloudy days a year, we enjoy mild, sunny weather throughout the year. Climate is so mild that many rental properties do not have Air conditioning, which is one less appliance to worry about. Hurricanes are very rare and heavy snow and ice are very very rare in the wintertime. From a real estate investor stand point, you can expect the life expectancy of exterior materials such as roofs to last longer. If you install a tank-less water heater and Drought-Tolerant Landscaping, you will have a relatively maintenance-free rental property. Although we do have some floods that damage the property now and then, it is easy to avoid those locations. Just ask the neighbors.

Do you think of any other cities good for rental investment? Leave a comment!

Mark Kunce - Keller Williams San Diego Metro - The My Home Team

San Diego Housing Market Update September 2015

San Diego Housing Market is steady throughout San Diego County.

For the 12-month period spanning October 2014 through September 2015, Pending Sales in San Diego County were up 10.4 percent overall.

The Median Sales Price was up 4.5 percent to $527,500 for Detached homes and 3.6 percent to $347,000 for Attached homes. The price range that tended to sell the quickest was the $500,001 to $750,000 range at 37 days; the price range that tended to sell the slowest was the $1,250,001 or more range at 65 days.

Closed Sales decreased 4.9 percent for Detached homes but increased 4.1 percent for Attached homes. Don’t be surprised to hear that San Diego Home sales.

Market-wide, inventory levels were down 30.6 percent. The property type that lost the least inventory was the Single-Family Homes segment, where it decreased 21.4 percent. That amounts to 2.7 months supply for Single-Family Homes and 2.1 months supply for Condos – Townhomes.

Don’t be surprised if you hear “San Diego County Home sales are down” or “San Diego’s Housing Market has slowed down” during the next few months. We will be in a typical seasonal drop-off with lower inventory than last year.

It is a great time for sellers who have a Single-Family Home with un-permitted additions. With a lack of inventory, buyers will make some compromise and not be so particular.

For buyers, it might be tougher to find a perfect Home to purchase. Buyers needs to work with a great buyer's agent who will search some off-market listings (Cancelled Listings, Expired Listings, etc). Great news is that the one thing we were anticipating in September, an increase in interest rates, did not happen. It most likely will though before year’s end.

Mark Kunce

Keller Williams San Diego Metro - The My Home Team

Home Buying tips: Request for repairs

My clients are purchasing a house in Mount Merritt, Rancho El Cajon, near the Mount Helix area. Even though the house was completely remodeled recently, we submitted a request for repairs (and got almost all of it accepted).

A very important part of a Real Estate transaction, but also a very misunderstood part of the transaction is the request for repairs also known as the RFR.
Buyers often think that by requesting repairs the seller is required to do these repairs. But this is not the case. The seller can decide to either do all the repairs, a part of the repairs, none of the repairs, or give some money or credit to the buyer to have repairs done.
Most of the request for repairs should only include things that involve Health and Safety issues, or differed maintenance that should have been kept up by the seller in the first place. Smoke alarms, GFCI outlets, problems that would cause an appraiser to have to come back and look at the property again should definitely be dealt with, hopefully prior to the appraisal.
Often times major things like foundation problems or something that couldn’t have been seen in the initial viewing of property could mean that you need to renegotiate the purchase price rather than actually do a request for repairs.
One thing I always do for a request for repairs is kind of make grocery list from the inspection report. Then have the buyer decide what is very important to them, and what’s not so important. Don’t get petty. Things that are natural wear and tear should probably not be considered. However, you may want to add a few things to the list that you may not care that much about but which give seller something to reject. This may make it easier to get a couple of the things you do want done.
As a listing agent I really do not want to see a request for repairs however, I believe a buyer’s agent should always submit one on behalf of their client.
If you have any questions, contact Mark Kunce at mark@sdmyhome.com or visit my website.