Real Estate in San Diego
Specialist · San Diego, CA · Member since 2019 · 12 posts · 4 votes
Hey I'm new to investing and new to biggerpockets and trying to learn/experience everything I can. I live in San Diego currently and from what little I've gathered about the market here and real estate strategies, it's 100% a buyers market and probably not worthwhile to get into rental properties which is what I had originally wanted to focus on.
Are there any investors here living and/or investing in San Diego that can give me some advice about the market or how you manage your business here? Or if you take your business to other area that is more profitable.
Would love some more info or ideas on where to get info!
Hey I'm new to investing and new to biggerpockets and trying to learn/experience everything I can. I live in San Diego currently and from what little I've gathered about the market here and real estate strategies, it's 100% a buyers market and probably not worthwhile to get into rental properties which is what I had originally wanted to focus on.
Are there any investors here living and/or investing in San Diego that can give me some advice about the market or how you manage your business here? Or if you take your business to other area that is more profitable.
Would love some more info or ideas on where to get info!
How long have you lived in San Diego?
San Diego has historically been near the top of nation in buy and hold RE ROI. How can that be with property prices so high? It is because property prices are so high that the return has historically been outstanding. When property values rise, there is typically a rise in rents. How big an increase? In recent years rents on SFR have gone up on average over $100/month year over year. My statistics from June 2018 show that SFR rents increased $475 on average in the previous 3 years (so significantly more $100/month).
So if you purchased a San Diego cash neutral SFR in June 2015 by June 2018 you would be ~$475/month cash positive (assume fixed rate loan). In addition, my appreciation stats from the same time (June 2018) show that the average San Diego SFR increased $152K in the previous 5 years.
S&P Case-Shiller indicates that San Diego was among the top 4 large cities in home price increases (June 2018).
Property and rent appreciation is why San Diego RE has produced outstanding ROI.
How do the smart buy and hold RE San Diego investors do even better? They purchase value add properties, add the value, refinance. If this is something you are unfamiliar with search for BRRRR on Bigger Pockets.
Virtually all my purchases use this model. I project outstanding ROI upon the value add. Most of the time in the 30% to 60% after the value add, but due to market appreciation, I have multiple RE that has none of my money still invested (the infinite ROI). After the great initial return, the rents are at top of market producing solid cash flow that has a long history of great appreciation.
Good luck
San Diego is about timing. Someone who bought in 2006 feels much different than someone who did in 2009-2015
Its likely we're at the end of a big appreciation push, which could leave us feeling like its closer to a 2006 situation than one where more appreciation and growth is coming. If we look at this over a 20 or 30 year window it becomes less significant... but personally I am not buying anything to hold currently in San Diego and anticipate values to drop.