Solana Beach, CA · Member since 2016 · 29 posts · 3 votes
Hi all I was considering buying a home in Encinitas with the idea of living in it, fixing it up a bit and at some point renting it out and moving on to another property. Anyone have any experience with rentals in this area and/or have any insight on the direction of the market in this overinflated and low inventory location?
Developer · Carlsbad, CA · Member since 2010 · 21 posts · 4 votes
9y
It would be tough to make sense of the numbers doing that in Encinitas. Mortgage payments for a property costing $700K would be around $3K. Factor in property taxes and you are looking at negative cash flow.
I love Encinitas/Leucadia as I'm also looking for a property to buy as a primary there, but prices are crazy right now. Unless I find a deal, I'll wait a couple years for a price adjustment.
Solana Beach, CA · Member since 2016 · 29 posts · 3 votes
9y
@Taj Waggaman Taj in your estimation what rent do you think a reasonably updated 1800 sq ft sfh could achieve in that area? I am running my numbers through the BP rental calculator and if I'm being honest with myself I'm getting negative cash flow on the property with a 3k/month rent. Thanks for the input!
Real Estate Agent · Encinitas, CA · Member since 2016 · 2 posts · 0 votes
9y
Honestly there are so many variables, but assuming relatively upgraded, 3bdrm/2bth can get $3,500/mo. maybe more depending on specific location and appearance - another great area is Pacific Serena - these small 2bdrm twin homes pull in $2,500-$3,000/mo. easily - (http://www.pacific-serena-homes.com/what-just-sold.html) -or- Encinitas Estates - People want to live in Encinitas, so that is always good for business ;)
Thanks for passing along the knowledge Dan, all those things were helpful as well as the listing of the most recent sales in Encinitas bc I was wondering what some of those houses sold for.
Curtis I do check all those boxes you mentioned. The most compelling reason for me not to buy would be my rent in Solana Beach is very cheap, I got very lucky! However the tax breaks would be great! What do you mean by that you get 250k tax free (i'm not married)? I understand the general interest and property tax write offs but I would be writing off much less than 250k.
If you live in your personal residence 2 of 5 years you get 250k of the gain tax free when you sell if your single and 500 if married.
Solana Beach, CA · Member since 2016 · 29 posts · 3 votes
9y
Curtis Gabhart Taj Waggaman Taj I have thought about the rent possibly going up but we have been lucky so far in 6 years they raised it only $50. It is a consideration though when looking at houses. Yeah O had read about that capital gains deduction after you mentioned it which is really great.
Curtis thanks for the info regarding rents. It seems to be pretty close to what I found on rentometer. If you manage the property yourself it seems realistic to at least break even in that area.