Condo to live in then rent in Concord, CA

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Condo to live in then rent in Concord, CA

Marie C.
Member since 2020 · 3 posts · 0 votes

My husband and I are first time homebuyers. Our current plan is to buy a 2 bedroom condo in Concord, live there for a few years, and then turn it into a rental. My brother in law will also be living with us. Our budget is tight because we are putting both of my brothers in law through college. So we really want this to be a good investment rather than solely a place to live. I was hoping to find a place that needs some cosmetic work but has AC and in unit laundry. But I am realizing I may need a make a few more compromises.

Our realtor says that it's difficult to find a complex without rental restrictions in Concord. There are a few but those HOAs also seem to have poorer external maintenance and landscaping. Our agent seems to think we should just plan to live in the unit for at least 7 years. But I am concerned that we may need to move for work sooner than that. And I want to ultimately buy another property in a few years. We have been searching every weekend for about a month and have only put in one offer so far that was out bid. I would very much appreciate any advice.

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  • Annchen Knodt
    Investor · Durham NC (and Brenham, TX) · Member since 2018 · 301 posts · 197 votes
    5y

    Hi @Marie C. , I'm currently doing this exact thing in Maryland near DC.  I was kind of surprised to find a well-kept complex without major rental restrictions, though I have some fear that may change.  The fact that these types of thing (along with special assessments etc) are mostly out of your control certainly makes condos a drawback, but as I imagine is the case for you I didn't really see any other options for acquiring a place that could reasonably work as a rental when I move out.  I wish I had more seriously considered townhomes though.

    I also regret not fully considering the impact COVID would have on my geographical living restrictions - I moved here and bought this condo last year for my fiance's job, but he has yet to physically go back to work and there's no indication of when he might actually do so, and we are seriously considering moving back to NC where I'd much rather focus my real estate investing dollars/energy.  I realize this may not be your situation, but perhaps something to consider.

    I also have some regrets with purchasing a place that required cosmetic work - I did this for the potential to add value and also to have slightly less competition from other buyers, but per the laws of nature it's ended up taking way more time and energy than I expected and distracted me from other things that are more important.

    In case it's useful to you, I've uploaded a spreadsheet i did to run numbers for my "live in, then rent" scenario (where i consider things like savings vs renting, what the outcome might look like after X years of living there and Y of renting, etc): https://www.biggerpockets.com/...

    Finally my top advice is probably to get more input from other folks in your area (you certainly don't want your only advice coming from your agent, where there's a conflict of interest!)  If you haven't already I'd highly recommend looking for biggerpockets meetups in your area, and also joining the investHer community and looking for local chapters.

    Good luck!

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  • Rick Trivedi
    Real Estate Broker · San Jose, Dublin CA and Florida · Member since 2017 · 165 posts · 48 votes
    5y

    @Marie C. Generally we advice potential buyers to look at the monthly HOA fees. For few hundred additional $ that you spend monthly in HOA, your purchasing power could increase by hundred thousand or more in additional mortgage so you can actually afford a single family home instead. Normally independent homes are much better investments for appreciation and potential to expand in future without restrictions from HOA etc. We are local in easy bay, happy to help if you need any additional help.

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