What are good locations in the Bay Area if you want to invest in new construction rental properties? The focus would be on appreciation, low maintenance, low vacancy. The cheapest areas I've seen just browsing around seem to be in Sacramento, but not sure if that's the best choice or not since it's rather far. Was also looking at Dublin, Livermore, San Ramon, Concord, Walnut Creek....does anyone have suggestions or advice?
Commercial Real Estate Broker · Sacramento, CA · Member since 2015 · 102 posts · 50 votes
7y
“Cheap” is relative. We have seen a flurry of activity from Bay Area investors buying up comm here in the Sac area, driving up prices in both MF and and comm retail.
Commercial Real Estate Broker · Sacramento, CA · Member since 2015 · 102 posts · 50 votes
7y
“Cheap” is relative. We have seen a flurry of activity from Bay Area investors buying up comm here in the Sac area, driving up prices in both MF and and comm retail.
Real Estate Agent · Cupertino, CA · Member since 2016 · 4k+ posts · 1k+ votes
7y
Near Bart stations. Just about every new station people already thought and speculated in these investments. They have driven up the price of these 3 story tree townhomes or SFH homes a lot.
Rental Property Investor · San Francisco, CA · Member since 2014 · 52 posts · 35 votes
7y
@Natalie Hahn there's a lot of development happening in west oakland. It's super close to BART so location is great. It just all depends on the project and your strategy. For example, I know an investor working towards tearing down a building and constructing a 15ish unit building near Lake Merit. I'm guessing those new units would have low maintenance and low vacancy since they're new.
Rental Property Investor · San Anselmo · Member since 2015 · 659 posts · 600 votes
7y
@Natalie Hahn out of curiosity, why are you so focused on new construction and appreciation?
I understand your thought process on minimal maintenance, but rehabbing a pre-existing structure can do that, for much less money than the cost of new construction.
Factoring in the inflated cost per sq ft of new construction ($300+) right now, land, permitting, holding costs, landscaping, it will be hard, if not impossible to cash flow.
Have you looked into doing a rent quality rehab in a secondary market (Rio Vista, Vacaville, etc)?
Rental Property Investor · CA · Member since 2018 · 225 posts · 180 votes
7y
I don’t think you will find it in concord or Walnut Creek, new homes there are too expensive. $900k for a 4 bed 4 bath new home in Concord (80 Mayhew Way Pleasant Hill. According to Rentometer that will rent for about $3,600/month. I didn’t run the numbers, but that is a lot of cash for little return.
That’s risky for an “investment” I say that because counting on appreciation is more like speculation. Walnut Creek homes would probably be more, you can check near rossmoor there is a new development there going up.
Investor · Pasadena, CA · Member since 2015 · 269 posts · 189 votes
7y
@Natalie Hahn mountain view and redwood city has the highest rents in bay area (aside from SF... But trust me you don't want to build in SF a lot of the new constructions going up now took over 10 years to get the entitlement)
Also most places have HOA fees, be careful when you look at them. THe state of CA doesn't want to pay for any services, so they just shove all the cost to the HOA.