Here’s what you need to know to get your real estate investment portfolio started.
Perhaps you’ve heard this tried-and-true saying: “You’ll never go broke investing in San Diego real estate.” Real estate investment is one of the reasons I moved to San Diego 12 years ago.
When it comes to determining whether you should leap into real estate investing, there are two main things to consider:
1. Cash flow. When you take the rent you’re charging tenants minus the mortgage, taxes, maintenance, etc., what’s left?
2. Appreciation. What is the percentage, year over year, that the value of the property appreciates? How quickly are you building equity?
“Appreciation will happen regardless—San Diego is a great market.”
You can invest in all sorts of properties, but in my opinion, forget about condominiums—they tend to have homeowners associations, adding another layer of complexity to your strategy. I also recommend two to four units. If they’re strictly used for cash flow purposes, they typically require a 25% down payment.
Appreciation will happen regardless—San Diego is a great market. But the cash flow in some areas (often referred to as “less desirable” areas, or gentrifying areas) will be way less than others.
In gentrified areas, you’ll have higher cash flow and a little less appreciation, but that’s your retirement plan. If you’re looking for a place to live or your next investment property, feel free to reach out by phone or email. I’m more than happy to help.
