Hello everyone. I live in SF but commute regularly to Sacramento for work. I am familiar with the area but not on a real estate level. Looking to make a modest $150-$200 investment into a one bedroom condo near Arden. The average HOA fees are about $300-$400. Looking for thoughts whether this is a good idea for buy / rent /hold and potentially live in the future if need be. If not, what are better alternatives? Thanks a lot!
@Arkady Itkin, I would agree with Gordon's response. Before purchasing, you'll need to know if the HOA has restrictions or a percentage limit on non owner occupied units - this includes leasing it as a short term rental. Some HOAs are rewriting their bylaws to prevent owners from exercising this option which can be much more lucrative than a long term lease. You'll also want to know the available operating reserves for capital improvements or maintenance of the HOA and community rules and regulations before closing the deal. Going with a SFH gives you more options without these limitations . Best of luck!
@Arkady ItkinHaving just a one bedroom limits the number of potential tenants that you can rent to. It also lowers the amount of potential rents compared to a 2br or 3br condo. Take for example 3544 larchmont square ln Sacramento listed for 210k. The hoa dues are 310 per month. The potential rents are 1800 per month. I just dont know if the hoa allows for rentals. some do, some do not. You could buy a house for 60k more and your payments are the same as the condo with 300 per month in hoa fees. Just something to think about since mortgage rates are so low.
@Arkady Itkin, I would agree with Gordon's response. Before purchasing, you'll need to know if the HOA has restrictions or a percentage limit on non owner occupied units - this includes leasing it as a short term rental. Some HOAs are rewriting their bylaws to prevent owners from exercising this option which can be much more lucrative than a long term lease. You'll also want to know the available operating reserves for capital improvements or maintenance of the HOA and community rules and regulations before closing the deal. Going with a SFH gives you more options without these limitations . Best of luck!
I know someone doing this currently in Pocket. The cashflow is meager, at ~150$. The cashflow is so low that I would be very weary if the property was on the older side as repairs will wreck you. Its more of an appreciation play. If you commute there and want the option of staying there, that could very well make sense. Otherwise its not an attractive investment strategy for ROI.