Hi All, We own a 2 bd/2ba condo in a luxury high rise in downtown San Jose. We purchased it when we lived up there, and then have had it rented for about 5 years. We are living in San Diego now. San Jose has a ton of new high rises being built (5000 high rise condos or apartments are in the process of construction, or have been approved for construction, etc). Obviously developers think that the downtown of San Jose is worth investing in. We have about $150K of equity in our condo (after taxes etc if we sell). We essentially break even on the unit right now. Monthly cost to maintain unit runs about $4k. My concerns are that they could over build, and rents and property values would go down until it the units fill up again. We could face vacancies and/or have to lower the rent and carry a loss for a while. it seems that property values should eventually go up, if the downtown gets nicer, busier, has more jobs, restaurants, retail, etc. Silicon valley needs more housing and jobs are in abundance. The downtown of San I am not sure how to decide on whether to rent again (lease is coming up for current tenants and they are moving out) or sell now? Any thoughts would be appreciated!

@Lenore C. in my humble opinion, I don't think you are giving enough information to the community to get an answer of any real value. It would be extremely helpful to know what you paid for the unit, where in DT SJ the unit is located and the condition/amenities of your unit. I personally feel $4000 a month is a GIANT nut for a 2/2 condo in a crappy old complex. It is a completely different story if you are on a top floor unit with great views. The fact that you think you only have $150k of equity and your reply to Nathan G. that you think the property value increased by $300k in 5 years, throws more confusion into the mix. Was the refi that you did a large cash out refi? It sounds like it was... If that is the case, did you buy another asset with that money or did you blow the money on liabilities? Sorry if this sounds harsh, I don't mean it to be a smack down, I am just trying to better understand your situation before addressing your question. On another note, before you commit to the idea that weird and strange are not good traits, just keep in mind places like: The Mission District in SF, SoHo in NY, and countless other places around the globe. Even though they were once thought to be weird and strange the values in those areas have blown up over time. I personally think looking for "weird and strange" before it becomes "hip and cool" is not a bad use of time... But the idea of SJ being weird and strange moving to hip and cool is a totally different topic as is the topic of condos as good investment properties or not.

Sell or keep renting? How to decide?

Fabio Salas

Investor · Champaign-Urbana, IL · Member since 2014 · 84 posts · 49 votes

9y

I live in SD as well and think about scenarios like these often with my own rentals. Personally, I think the San Jose market is a strong market so if you can afford to carry a temporary loss for a short time, I say keep renting it. I believe in the long term the equity and appreciation you'll get out of that condo will be worth the losses you may carry during a dip in the market, even if that dip lasts a few years. You just have to make sure you have money reserved so you're not struggling financially if and when the market does drop.

Sell or keep renting? How to decide?

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