Need some advices for second House, Irvine or Laguna or Newport

[mikeirvine]

I bought one of the 2010 house in Irvine, mainly for my kid school and we plan to stay in it for another 10 to 15 years .... we love our new house.

My wife and me are thinking of buying a second house for rent or long term investment. 

We prefer these three locations, Laguna, Newport and Irvine. For investment and rental, which location make more sense ...... ? I prefer Laguna beach.

Any advice will be helpful .....

Mike

 

[irvinehomeowner]

I think any of those places will make a good rental depending on how much you buy it for.

Seems like all of them still have their mini-bubbles going on.

I prefer Irvine only because if you are looking to rent it out... it has 3 built-in audiences:

1. Families
2. Students
3. Young professionals

While Laguna and Newport may be able to get you 1 and 3... number 2 is an edge for Irvine because of UCI. Unless there was some Cal State Laguna Beach or UC Newport built when I wasn't looking. And while Newport can probably draw UCI students (I knew people who lived in Newport and went to UCI), seems like it would be harder to market to them.

 

[irvinehomeowner]

On second thought... buy a nice 3CWG in Irvine and rent it to us for cheap... heh.

 

[sgip]

MnI - Be ready for at least 25% down and a mortgage rate about 1/2 percent higher than those for owner occupied. Lenders will also qualify the purchase with your current home, any other real estate not rented, and this new home in your debt to income ratios. Unless you have other properties that you've managed for the past two years, most lenders will limit the total debt to income with all of those homes added in to about 43% DTI. Be sure to have at least 6 months of house payments per property in the bank.

Those are the usual suspects people don't plan around when looking to buy an investment home.

My .02c

Soylent Green Is People

 

[mikeirvine]

On second thought... buy a nice 3CWG in Irvine and rent it to us for cheap... heh.

I think any of those places will make a good rental depending on how much you buy it for.

Seems like all of them still have their mini-bubbles going on.

I prefer Irvine only because if you are looking to rent it out... it has 3 built-in audiences:

1. Families
2. Students
3. Young professionals

While Laguna and Newport may be able to get you 1 and 3... number 2 is an edge for Irvine because of UCI. Unless there was some Cal State Laguna Beach or UC Newport built when I wasn't looking. And while Newport can probably draw UCI students (I knew people who lived in Newport and went to UCI), seems like it would be harder to market to them.

I prefer to rent to family and the house has to be at least 3 bed and detach town house.

Thanks,
Mike

 

[IndieDev]

All 3 cities you listed are in heavy bubbles. You won't recover any actual profit in rent based on current prices. Buy now only if you enjoy throwing cash into a wood fire.

If by chance the latter applies to you, Irvine is your best option since it's the least inflated of the markets you mentioned.

 

[mikeirvine]

We never manage rental before but our parent are into that business for commercial and houses rental. My wife is interested in starting a business and she is a stay home mum and don't have much time ( kids )..... so we are think of buying properties to rent out ...... might be easier for her to manage. 

I plan to put down 80% to 70% down for my second home,  just like my first home. I 'm not looking for monthly income from the home rental, just enough to break even for the  mortgages, maintenance and taxes.

Thanks again,
Mike

MnI - Be ready for at least 25% down and a mortgage rate about 1/2 percent higher than those for owner occupied. Lenders will also qualify the purchase with your current home, any other real estate not rented, and this new home in your debt to income ratios. Unless you have other properties that you've managed for the past two years, most lenders will limit the total debt to income with all of those homes added in to about 43% DTI. Be sure to have at least 6 months of house payments per property in the bank.

Those are the usual suspects people don't plan around when looking to buy an investment home.

My .02c

Soylent Green Is People

 

[IndieDev]

We never manage rental before but our parent are into that business for commercial and houses rental. My wife is interested in starting a business and she is a stay home mum and don't have much time ( kids )..... so we are think of buying properties to rent out ...... might be easier for her to manage. 

Your wife doesn't have much time, but wants to start a business as a property manager?  :-\

Have you two talked to your parents about what it takes to manage properties?

 

[mikeirvine]

She don't have time as she is my full time home maker .....  but she has the cash, she want to be properties owner but not the manager.

Their properties are not in CA, and we love where we are and what I'm doing.

Seem like you guys think Irvine is a better investment compare to Laguna and Newport.

For Newport it seem like a 3 bedroom house cost at least over 1.5 million, Laguna I can get something I like for around 1.4 million. For Irvine I can buy 2 small 700k detach house for rental.

Irvine seem the safest, if I put down 500k and loan 200k my for a 700k 3 bed rental house, my mortgages will be around $1000 and the other taxes and maintenance will be around $1000. A 2 bed room town house rental in WB is about $2200. If I keep that properties for 10 to 15 years and the renter paid for my mortgages.

I prefer buying new resale that have landscape and upgrades done ..... maybe looking into shortsale.

Thanks again,



 

We never manage rental before but our parent are into that business for commercial and houses rental. My wife is interested in starting a business and she is a stay home mum and don't have much time ( kids )..... so we are think of buying properties to rent out ...... might be easier for her to manage. 

Your wife doesn't have much time, but wants to start a business as a property manager?  :-\

Have you two talked to your parents about what it takes to manage properties?

 

[usctrojancpa]

She don't have time as she is my full time home maker .....  but she has the cash, she want to be properties owner but not the manager.

Their properties are not in CA, and we love where we are and what I'm doing.

Seem like you guys think Irvine is a better investment compare to Laguna and Newport.

For Newport it seem like a 3 bedroom house cost at least over 1.5 million, Laguna I can get something I like for around 1.4 million. For Irvine I can buy 2 small 700k detach house for rental.

Irvine seem the safest, if I put down 500k and loan 200k my for a 700k 3 bed rental house, my mortgages will be around $1000 and the other taxes and maintenance will be around $1000. A 2 bed room town house rental in WB is about $2200. If I keep that properties for 10 to 15 years and the renter paid for my mortgages.

I prefer buying new resale that have landscape and upgrades done ..... maybe looking into shortsale.

Thanks again,



 

We never manage rental before but our parent are into that business for commercial and houses rental. My wife is interested in starting a business and she is a stay home mum and don't have much time ( kids )..... so we are think of buying properties to rent out ...... might be easier for her to manage. 

Your wife doesn't have much time, but wants to start a business as a property manager?  :-\

Have you two talked to your parents about what it takes to manage properties?

Definitely stay away from Newport and Laguna Beach as the return on your investment will be very low.  Irvine is definitely a safe play but your return will only be slightly higher.  Have you considered areas such as Ladera Ranch and Aliso Viejo?  Those are very nice areas that are a lot closer to rental parity than Irvine is.  You can always diversify by buying a home in each of the 3 cities.  I would advise you not to put too many eggs in one basket.  Have you considered buying 4-unit or larger rentals in Long Beach?  They can throw off some very decent returns on your money.  It's all about putting pen to paper in guestimating what your returns might be on a proforma. 

 

[irvinehomeowner]

Have you considered buying 4-unit or larger rentals in Long Beach?

I know someone here who might want to rent from you if you can diversify the other 3 tenants. 

Just buy a Tapestry or Olivos with a view lot in QH and I'll rent it from you if you give me a good discount... hehe.

 

[iheartdebt]

Either throw the cash into the wood fire, or leave it in the bank to die a slow 0.2% savings interest death.  I hear a lot of family and friends of family thinking about doing the same thing mikeirvine is considering, if they haven't already gone down that path already.  And if it's rented back out to family, even better.  In 20-30 years, who cares, Irvine will be built out, there will be no more land, the weather will still be in the same general range and it doesn't sound like mikeirvine or his wife is counting on the cash wad any time soon that will be used for the downpayment anyway.  Timing the short term doesn't have as much importance.  I can't help but keep concluding that is what a "normal" homebuyer is up against these days.

All 3 cities you listed are in heavy bubbles. You won't recover any actual profit in rent based on current prices. Buy now only if you enjoy throwing cash into a wood fire.

If by chance the latter applies to you, Irvine is your best option since it's the least inflated of the markets you mentioned.

 

[IndieDev]

In 20 years, the money used to buy two rental properties in Irvine can be easily doubled with conservative investment vehicles.

Do you think two irvine rental houses will return that on an amortization schedule of 15 or 30 years? Unlikely.

 

[test]

In 20 years, the money used to buy two rental properties in Irvine can be easily doubled with conservative investment vehicles.

Do you think two irvine rental houses will return that on an amortization schedule of 15 or 30 years? Unlikely.

And the rate the fed is printing money the equity in those rental houses will be worth 10x, all the while bringing in rental income.

 

[IndieDev]

In 20 years, the money used to buy two rental properties in Irvine can be easily doubled with conservative investment vehicles.

Do you think two irvine rental houses will return that on an amortization schedule of 15 or 30 years? Unlikely.

And the rate the fed is printing money the equity in those rental houses will be worth 10x, all the while bringing in rental income.

Just like Tustin District isn't really badly designed, it's just that too many people use it.

 

[iheartdebt]

test, you beat me to it.  Doubling, tripling or quadrupling your money doesn't mean much if you aren't preserving purchasing power.  It depends on how you think central banks' actions will shape the future financial landscape.  Think, confiscation by inflation... or how about forcing citizens to redeem gold at a government set exchange?  I highly doubt the latter will happen again, just sayin'.

In 20 years, the money used to buy two rental properties in Irvine can be easily doubled with conservative investment vehicles.

Do you think two irvine rental houses will return that on an amortization schedule of 15 or 30 years? Unlikely.

And the rate the fed is printing money the equity in those rental houses will be worth 10x, all the while bringing in rental income.

 

[iheartdebt]

she has da caaash.  lol!

She don't have time as she is my full time home maker .....  but she has the cash, she want to be properties owner but not the manager.

Their properties are not in CA, and we love where we are and what I'm doing.

Seem like you guys think Irvine is a better investment compare to Laguna and Newport.

For Newport it seem like a 3 bedroom house cost at least over 1.5 million, Laguna I can get something I like for around 1.4 million. For Irvine I can buy 2 small 700k detach house for rental.

Irvine seem the safest, if I put down 500k and loan 200k my for a 700k 3 bed rental house, my mortgages will be around $1000 and the other taxes and maintenance will be around $1000. A 2 bed room town house rental in WB is about $2200. If I keep that properties for 10 to 15 years and the renter paid for my mortgages.

I prefer buying new resale that have landscape and upgrades done ..... maybe looking into shortsale.

Thanks again,



 

We never manage rental before but our parent are into that business for commercial and houses rental. My wife is interested in starting a business and she is a stay home mum and don't have much time ( kids )..... so we are think of buying properties to rent out ...... might be easier for her to manage. 

Your wife doesn't have much time, but wants to start a business as a property manager?  :-\

Have you two talked to your parents about what it takes to manage properties?

 

[mikeirvine]

She has cash and she loves me ..... if she want another house I go buy another house .... that simple, right?

Thanks for all the advices

she has da caaash.  lol!

She don't have time as she is my full time home maker .....  but she has the cash, she want to be properties owner but not the manager.

Their properties are not in CA, and we love where we are and what I'm doing.

Seem like you guys think Irvine is a better investment compare to Laguna and Newport.

For Newport it seem like a 3 bedroom house cost at least over 1.5 million, Laguna I can get something I like for around 1.4 million. For Irvine I can buy 2 small 700k detach house for rental.

Irvine seem the safest, if I put down 500k and loan 200k my for a 700k 3 bed rental house, my mortgages will be around $1000 and the other taxes and maintenance will be around $1000. A 2 bed room town house rental in WB is about $2200. If I keep that properties for 10 to 15 years and the renter paid for my mortgages.

I prefer buying new resale that have landscape and upgrades done ..... maybe looking into shortsale.

Thanks again,



 

We never manage rental before but our parent are into that business for commercial and houses rental. My wife is interested in starting a business and she is a stay home mum and don't have much time ( kids )..... so we are think of buying properties to rent out ...... might be easier for her to manage. 

Your wife doesn't have much time, but wants to start a business as a property manager?  :-\

Have you two talked to your parents about what it takes to manage properties?

 

[mikeirvine]

Great advices

I prefer ocean view but cost more and not great for rental to family.

I did consider other locations but investment return it not our top focus but it's important. We have to like the house and location and near Irvine.

What about Laguna Niguel?


[/quote]
Definitely stay away from Newport and Laguna Beach as the return on your investment will be very low.  Irvine is definitely a safe play but your return will only be slightly higher.  Have you considered areas such as Ladera Ranch and Great advices
?  Those are very nice areas that are a lot closer to rental parity than Irvine is.  You can always diversify by buying a home in each of the 3 cities.  I would advise you not to put too many eggs in one basket.  Have you considered buying 4-unit or larger rentals in Long Beach?  They can throw off some very decent returns on your money.  It's all about putting pen to paper in guestimating what your returns might be on a proforma. 
[/quote]

 

[usctrojancpa]

She has cash and she loves me ..... if she want another house I go buy another house .... that simple, right?

Thanks for all the advices

she has da caaash.  lol!

She don't have time as she is my full time home maker .....  but she has the cash, she want to be properties owner but not the manager.

Their properties are not in CA, and we love where we are and what I'm doing.

Seem like you guys think Irvine is a better investment compare to Laguna and Newport.

For Newport it seem like a 3 bedroom house cost at least over 1.5 million, Laguna I can get something I like for around 1.4 million. For Irvine I can buy 2 small 700k detach house for rental.

Irvine seem the safest, if I put down 500k and loan 200k my for a 700k 3 bed rental house, my mortgages will be around $1000 and the other taxes and maintenance will be around $1000. A 2 bed room town house rental in WB is about $2200. If I keep that properties for 10 to 15 years and the renter paid for my mortgages.

I prefer buying new resale that have landscape and upgrades done ..... maybe looking into shortsale.

Thanks again,



 

We never manage rental before but our parent are into that business for commercial and houses rental. My wife is interested in starting a business and she is a stay home mum and don't have much time ( kids )..... so we are think of buying properties to rent out ...... might be easier for her to manage. 

Your wife doesn't have much time, but wants to start a business as a property manager?  :-\

Have you two talked to your parents about what it takes to manage properties?

Does your wife have a cute, single sister?