Investing in rental properties OC or IE ?

[momopi]

Would it not be better to invest in lower cost real estate in the OC than Riverside?

I don't know what the rent to cost ratio is... like a how much a $200k home in the IE compares to a $400k home in the OC.

This is just a very rough math from my head.  If you bought a $200K SFR in South Riverside County during market low (2009-2012), the mortgage will be about $800/month and you can rent for $1600-1800.

If you bought a $400K SFR in Anaheim in same period, the house can be rented for $2600-2800/month, but your down payment, mortgage and taxes will double.

The SFR in South Riverside County may have some additional costs, like small monthly HOA, earthquake insurance (check fault lines!), and property management expense vs the SFR in Anaheim is closer if you wish to self-manage.

 

[OCLuvr]

What do you guys think of following article? Seems like IE still has a lot of room to grow.
http://www.ocregister.com/2017/06/25/how-much-longer-can-home-prices-keep-going-up/

 

[Burn That Belly]

x

 

[OCLuvr]

Good points. What do you say about IE market then?

 

[Burn That Belly]

x

 

[OCLuvr]

IE: For investment property/Rentals, as OC rental monthly numbers are not making sense any more?
Thoughts?

 

[OCLuvr]

I.E. Experts,
What would be your take on Riverside area for a rental property? I understand that it is late, but there is no other place in So California where monthly payments are covered by rent.
Do you guys think prices would at least hold to what they are today?
Thoughts?

 

[Burn That Belly]

x

 

[momopi]

I.E. Experts,
What would be your take on Riverside area for a rental property? I understand that it is late, but there is no other place in So California where monthly payments are covered by rent.
Do you guys think prices would at least hold to what they are today?
Thoughts?

IMO if you're going to invest, you should seek positive cash flow instead of "breaking even" or gambling on equity gains.  Riverside RE values are up and I would wait for next down cycle.

 

[momopi]

Good points. What do you say about IE market then?

IE market... is a different beast. It has no "brand" respect. It is the same thing as Hyundai trying hard to over-compensate by selling that Genesis G90 with a 5.0L V-8 at a cheaper cost than comparable BMWs. No matter what, Toyota and Honda will do what they do best selling their Camrys and Accords.

They have their own local/regional brands (neighborhoods) and reputation.  Nobody would mistake Casa Blanca with Canyon Lake...
https://www.redfin.com/CA/Canyon-Lake/29738-Big-Range-Rd-92587/home/5321390

 

[Burn That Belly]

x

 

[eyephone]

Good points. What do you say about IE market then?

IE market... is a different beast. It has no "brand" respect. It is the same thing as Hyundai trying hard to over-compensate by selling that Genesis G90 with a 5.0L V-8 at a cheaper cost than comparable BMWs. No matter what, Toyota and Honda will do what they do best selling their Camrys and Accords.

They have their own local/regional brands (neighborhoods) and reputation.  Nobody would mistake Casa Blanca with Canyon Lake...
https://www.redfin.com/CA/Canyon-Lake/29738-Big-Range-Rd-92587/home/5321390

Damn. Beautiful indeed. Mostly high ceilings throughout. Gives OH homes a run for its money. What's the school district like?? 

I believe there are other cheaper places in that same area. (I just looked it up using Redfin.)

 

[momopi]

Good points. What do you say about IE market then?

IE market... is a different beast. It has no "brand" respect. It is the same thing as Hyundai trying hard to over-compensate by selling that Genesis G90 with a 5.0L V-8 at a cheaper cost than comparable BMWs. No matter what, Toyota and Honda will do what they do best selling their Camrys and Accords.

They have their own local/regional brands (neighborhoods) and reputation.  Nobody would mistake Casa Blanca with Canyon Lake...
https://www.redfin.com/CA/Canyon-Lake/29738-Big-Range-Rd-92587/home/5321390

Damn. Beautiful indeed. Mostly high ceilings throughout. Gives OH homes a run for its money. What's the school district like?? 

It's Lake Elsinore district, so the East Side (Tuscany Hills, Canyon Lake) tend to be better than the west side & Wildomar.  Better schools can also be found to the South in Murrieta and Temecula, or to the North in Corona.

The problem is that commute from Canyon Lake/Tuscany Hills to Irvine is like 2 hours each way.  You could take the train at Corona station but still have to deal with 30 miles on the I-15.

 

[momopi]

Here's a few middle-upper areas to check out:

Alessandro Heights Listings:https://www.redfin.com/neighborhood/36/CA/Riverside/Alessandro-Heights

Hawarden Hills Listings:https://www.redfin.com/neighborhood/1214/CA/Riverside/Hawarden-Hills

Canyon Crest Listings:https://www.redfin.com/neighborhood/361/CA/Riverside/Canyon-Crest

Tuscany Hills listings:https://www.redfin.com/neighborhood/58379/CA/Lake-Elsinore/Tuscany-Hills

Canyon Lake Listings:https://www.redfin.com/city/2815/CA/Canyon-Lake
(WARNING:  Condos have high HOA fee here, pay more for SFR instead)



Cash flow in premium areas can be a challenge and will require a lot of patience and timing.

 

[shahshah]

if they create some sort of bullet train-hyperloop transport system from the IE to LA or Irvine what say you to property prices out there vs Irvine?

 

[eyephone]

if they create some sort of bullet train-hyperloop transport system from the IE to LA or Irvine what say you to property prices out there vs Irvine?

Btw - there currently is Metrolink

 

[eyephone]

if they create some sort of bullet train-hyperloop transport system from the IE to LA or Irvine what say you to property prices out there vs Irvine?

I just looked at the proposed bullet train map.
Orange County to LA (Irvine to Anaheim to LA)
SD to LA ( San Diego to LA) there's a stop in Riverside.
So if you want to go to Irvine from Riverside. It looks like you will have to take two trains. (First train from Riverside to LA, second train from LA to Irvine)http://www.hsr.ca.gov/Newsroom/Multimedia/maps.html

That is why I mentioned to take the metrolink. Because it connects the IE directly to OC.

 

[nosuchreality]

Board Metrolink IE line at 6:16AM in downtown Riverside, get off at the Irvine station at 7:26 or Tustin by 7:18.

or take the dedicated transit bus, one hour to main/macarthur.

 

[Ready2Downsize]

Does nothing.

Train every day is expensive and you still have to drive to and from the train and wait to get on and off and deal with "issues".

Hubby took the train to Burbank every day was a waste of time commuting. Wouldn't matter if it was a bullet train, he'd still rather be near work and drive.

 

[shahshah]

Interesting. So more space, 3 and 4 car garages, and large lot options but even if Elon's hyperloop concept eventually makes its way to IE --> Irvine it won't matter from what I'm hearing. What about a more likely option such as driverless cars? Even then folks could actually get work done during their commutes?