Hi Thor,
I am an investor and re broker in Stockton. You need to be very careful where you buy here. I have helped many clients purchase properties in quality areas, avoiding the ones you don't want to buy in.
We should schedule a time to chat. Are you local to the area?
All the best,
David McKeever
(209)483-6523
Hi Thor,
I am an investor and re broker in Stockton. You need to be very careful where you buy here. I have helped many clients purchase properties in quality areas, avoiding the ones you don't want to buy in.
We should schedule a time to chat. Are you local to the area?
All the best,
David McKeever
(209)483-6523
@Leslie B. Your message didn't seem to come through on the thread. It appears as "<p>@gloria</p>". Can you resend? Thanks!
Hi Thor,
I practice as an agent in San Jose but am actively investing in Stockton and Elk Grove for my personal portfolio. I own two rentals in Stockton and working on a third. If you're interested, send me a message and I will give you my number so we can chat.
As far as neighborhoods, most of the homes in the 95206 and 95207 areas of stockton are in nice neighborhoods. The 95204 and 95203 also have some pockets of good neighborhoods. My rule of thumb for investing in Stockton is to do a google street view and avoid areas where the homes have a fence in the front yard. It sounds silly, but it's actually a good indicator of the neighborhood.
@Leslie B. Pros of Stockton are that the local market is still very depressed from the housing crash. I believe that once the backlog of distressed properties is cleared out there will be more upward pressure on home prices from bay area transplants moving to the area. Prices in the bay area are not affordable for a lot of people where as you can still buy a nice house in Stockton for 250k.
The one bad thing about Stockton is that there is a lot of crime, even in good neighborhoods.
I'm still exploring Stockton as an option so my opinion may change after I gather more information, but:
Pros: (1) possible appreciation because it is close to the Bay Area and may benefit from people looking for cheaper housing options (indeed, the ACE train runs from Stockton to Silicon Valley); (2) a better rent-to-price ratio than many other California cities allowing for more cash flow opportunities; and (3) proximity to San Francisco, which allows me to invest closer to home.
Cons: (1) Stockton recently filed bankruptcy and could have future problems; (2) some high crime areas; (3) little in the way of strong local industries; (4) more dilapidated properties requiring increased maintenance costs; and (5) weaker tenant base.
These are just a few thoughts, but I'm sure others with more experience could provide a better or more complete view.
I'm still exploring Stockton as an option so my opinion may change after I gather more information, but:
Pros: (1) possible appreciation because it is close to the Bay Area and may benefit from people looking for cheaper housing options (indeed, the ACE train runs from Stockton to Silicon Valley); (2) a better rent-to-price ratio than many other California cities allowing for more cash flow opportunities; and (3) proximity to San Francisco, which allows me to invest closer to home.
Cons: (1) Stockton recently filed bankruptcy and could have future problems; (2) some high crime areas; (3) little in the way of strong local industries; (4) more dilapidated properties requiring increased maintenance costs; and (5) weaker tenant base.
These are just a few thoughts, but I'm sure others with more experience could provide a better or more complete view.
Stockton certainly has its pros and cons. (I haven't found a city yet that doesn't.) But I thought I might be able to help ease your concerns regarding some of your listed cons.
1) Stockton actually filed for bankruptcy protection back in 2012, and as of February of last year (2015) they've already emerged from it. So presumably, they're better off now than they were before. Regardless, their bankruptcy never impacted my rental business. However, I'm still glad they emerged from it in a better financial position.
2) Some high crime areas = true. Can't argue with that. But most cities around here do too (i.e. Sacramento, Oakland, etc). I don't know how you'd go about finding a city that doesn't and if you did they most likely wouldn't have reasonably priced rental houses. The key in any city is just know what areas to invest in, and which ones not to.
3) Agreed there's not a big tech industry in Stockton, but there's lots of schools (including several colleges), hospitals/medical facilities, and it's also close enough that you could commute to Sacramento or the Bay Area if you wanted to. (I actually have tenants in Stockton that commute to the Bay Area.)
4) More dilapidated properties = hard to say since that's a relative term. More dilapidated than what? I have rentals spread throughout the city and don't have any dilapidated properties near mine, and if I do see some that are an eyesore near mine than I have no problem notifying city code enforcement. Now, that's not to say that there aren't some areas of the city that have run-down houses/properties, because there certainly are. But again, that's no different than a lot of cities in my experience. (Little known fact = Stockton has the MOST responsive, and effective - in my opinion, code enforcement dept that I have ever dealt with. It's unbelievable how good/fast they are at helping clean things up when they get a complaint about something.)
4) As for the "weaker tenant base", I guess that's another relative term but I'm struggling to see what it's weaker than. (Granted I could be misunderstanding what you meant by this.) If you think you'll have a hard time finding a tenant or that there aren't lots of people looking for rental houses, I can assure you that is not the case. My overall vacancy rate averages about 2-3% and I don't think it's ever taken me longer than a week to find a good tenant. The last two houses I rented both took me only one day to rent, and that's with several qualified tenants to choose from. (One of the applicants I accepted confirmed that there was a lot of competition for good rental houses and said she'd actually been looking/applying for several months.) So I'd say the rental market in Stockton is actually quite strong.
I'm not trying to convince you to invest in Stockton though. Just giving you some local insight in the event it might help you. Probably the best thing to do is attend some local REIA meetings and talk with people down in the trenches. Whatever you decide, best of luck to you!
Great insights! I admittedly have no experience in Stockton other than driving through it a couple times. I was merely commenting on my personal thoughts and observations, which are not well informed.
What areas of Stockton do you like to invest in? SFR, duplexes, multi-units? It seems that the properties that cash-flow on paper are more likely to have 4+ units in (what I think are) class-C neighborhoods. Thoughts?
Great insights! I admittedly have no experience in Stockton other than driving through it a couple times. I was merely commenting on my personal thoughts and observations, which are not well informed.
What areas of Stockton do you like to invest in? SFR, duplexes, multi-units? It seems that the properties that cash-flow on paper are more likely to have 4+ units in (what I think are) class-C neighborhoods. Thoughts?
Currently all of my properties in Stockton are SFR houses in zip codes 95204, 95207, and 95210. There are better zip codes (95219), and worse ones (95206) in my opinion. I just like nice, clean, safe areas though and have found these to work well for me thus far.
@Leslie B. what do you see as the pros and cons of stockton? What areas do you like and dislike for the rental market there?
Kyle J and @Thor M. had some good PRO's and Cons already about Stockton. Here are a few quick ones as well.
Cons:
1. Crime. Crime has been and issue here for sometime and will continue to be and issue. When you look at the overall crime stats here, they look bad. But so does oakland, sacramento, etc. as Klye J mentioned. It is why I always start my investing search with location. There are some really good areas as well. I feel the majority of Stockton's crime is on the South side, not to say bad things happen in the north, but more happens there.
2. Lack of one strong industry. Stockton was and continues to be a strong agriculture city. There are lots of low paying jobs that come along with it. Stockton's biggest employer is San Joaquin County, followed by Stockton Unified school district. However, we do have 3 major hospitals here, another in French Camp and another VA hospital slated to break ground just south of Stockton. It is a big Blue collar field of workers with industrial and distributing companies as well.
Pros:
1. Affordability: This is one of the main reasons of Stockton's continued in bound population growth. There are more tenants and home buyers looking than we have houses for. This is one reason rents have increased in recents years. This is not a weak tenant base. Rental homes are in demand right now.
2. If purchased right, more potential for positive cash flow than other CA cities.
3. Lower prices than that of the Bay area, tracy and east bay. An obvious one.
I personally like North Stockton communities. Zip codes, 95207, 95209, 95204, 95219 (the most expensive and could be hard to cash flow) to name a few. Although, There are pockets of neighborhoods in these zips that you need to careful of. It all goes back to location. Buying in the right location will attract the best tenants resulting in less headaches, less turnover, less expense = More $ : )
Feel free to reach out to me if you want more info on specific areas or general market stats on Stockton and the surrounding areas.
David McKeever
Broker - McKeever Real Estate
@David McKeever, interested for a lot of the reasons mentioned above, including rail transportation connections to Sac, the Bay Area, and maybe more in the future. Like @Thor M., I do not know the area well myself.
Great discussion about Stockton. Also curious how Fresno vs stockton compare for investing? Both for cashflow and potential appreciation.
Thanks
Thanks for the information about Stockton. How is the multifamily situtation like in Stockton, or is it mostly SFH?
I've begun looking at properties invested and appreciate all the initial responses from @David McKeever @Leslie B. and @Thor M..
I'm interested if anyone has experience investing in 95203, which is South Stockton and close to "hotter" crime zones. This area seems to be transitional, in that there are many nice MF homes that have obviously been invested in, but are right next to abandoned homes.
Anybody have experience in these neighborhoods?
I'm from Stockton. I have managed properties there and I own a property there. I agree with the 95204 and 95207 zip codes being good. Good areas are Lincoln Village West and Quail Lakes. The rental market there always has ups and downs. In the 90's we had a lot of vacancies due to recession. There is not a big job base and there is high crime but the properties are affordable. I think Tacoma is a better market personally and for that reason I'm looking for a Realtor to list my duplex which is in N. Stockton off El Dorado and Hammer Lane.
Hi Catherine - The broker I work with deals with investors pretty much exclusively (he is an investor himself). And I'd recommend him. I'd be happy to give you his contact, PM me if you are interested.
I'm looking to get started in buy and hold, and Stockton is one of the areas im considering due to affordability. The info on this thread is very useful. Thanks, everyone.