no_vaseline_IHB
New member
SoCal78 said:
Those are exactly the ones that made me throw my hands up because they DON'T EXIST. If they did, they'd show up on Redfin or Zillow because they would have a tax record on file with the county.
INVESTMENT: Would you buy two 150k properties with higher rents in Tustin, or one 300k property in Irvine?
- Thread starter rikkus256_IHB
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Those are exactly the ones that made me throw my hands up because they DON'T EXIST. If they did, they'd show up on Redfin or Zillow because they would have a tax record on file with the county.
I'd rather remain semi-anonymous, so I won't post my address. I also believe I got an above-average deal on the house-I lucked out a bit. But a quick flip through Craigslist shows that people are asking up to $2,350 a month for four bedroom houses in Riverside, with prices between $1,500-2,000 being common. Now, those are asking prices, of course, and some of it is neighborhood-dependent. But there are 36 non-short sale, non-under contract 4 bedroom houses for sale on Redfin in Riverside right now for less than $200k, and 14 less than $150k.
It's very doable, IMHO, but you have to do it right. A four bedroom house for $200k or less near UCR (not a very big neighborhood) would be a great rental. I see five near UCR that sold for less than that in the last six months:
640 Highlander
1020 Minerva
3346 Santa Cruz
3410 Bahia
866 Spruce
Now, Redfin treats a bank taking back a property as a sale, so I'm not 100% positive these aren't those. The Minerva one looks like a real sale, judging from the MLS history. The Santa Cruz property was listed on the MLS although the recorded sale might still just be the bank taking it back because the sale was recorded so quickly. The Highlander house wasn't listed on the MLS, so it might just be the bank taking it back, or a non-hands off transaction. The Bahia and Spruce houses look like real sales, plus both are five bedrooms and would rent for more.
Properties with HOAs (or Mello Roos or other special taxes) do eat up quite a bit of the profit. The Riverside houses I listed don't have HOA fees and are old enough that they probably don't have Mello Roos or the like either.
Since you mention UCR, do you think you would rent to college students? Have you ever been a landlord, and if you have, have you ever rented to college students?
No matter how old or new or what type of home it is... dirt, wear and tear has a cost to remedy too.
So I would be hesitant to rent TWO places to college students... ONE is already way too much of a headache for me.
No way! Sought after vacation rentals are in Fullerton.
I can imagine how that college rentals have more maintenance (and vacancies) than long term, stable tenants. It's likely that rentals in college areas have higher GRMs to make up for that, however.
The GRMs do not make up for it... EVER! This is why I asked you if you have ever been a landlord, because you would know that renting to college kids in a college town is about as smart as investing in pets.com. The GRMs never make up for the 3 months of vacancies you have per year plus the clean up costs. A good RE investor knows that the value of the GRM is nothing compared to the value of a quality long term tenant.
Loaded questions (but not pointed at you because I think you will see where I am going with this): You have had 3 sets of students over the past few years. How many years? What is the turnover like with students? How often do they renew the lease? How many years have you had your rental, and how many different tenants have you had? By what percentage have you increased the lease by when you have needed a new tenant (if you want to give specifics that would be awesome, but I understand if you don't)? What is the typical cost to clean up after a tenant leaves?
Let me know if I am getting toopanda personal on you, but I think you see how I am going to make a point here.
They get better all the time don't they? Edit your post and pull that link out.
Those are exactly the ones that made me throw my hands up because they DON'T EXIST. If they did, they'd show up on Redfin or Zillow because they would have a tax record on file with the county.
Geotpf_IHB
New member
no_vaseline said:
I'd rather remain semi-anonymous, so I won't post my address. I also believe I got an above-average deal on the house-I lucked out a bit. But a quick flip through Craigslist shows that people are asking up to $2,350 a month for four bedroom houses in Riverside, with prices between $1,500-2,000 being common. Now, those are asking prices, of course, and some of it is neighborhood-dependent. But there are 36 non-short sale, non-under contract 4 bedroom houses for sale on Redfin in Riverside right now for less than $200k, and 14 less than $150k.
It's very doable, IMHO, but you have to do it right. A four bedroom house for $200k or less near UCR (not a very big neighborhood) would be a great rental. I see five near UCR that sold for less than that in the last six months:
640 Highlander
1020 Minerva
3346 Santa Cruz
3410 Bahia
866 Spruce
Now, Redfin treats a bank taking back a property as a sale, so I'm not 100% positive these aren't those. The Minerva one looks like a real sale, judging from the MLS history. The Santa Cruz property was listed on the MLS although the recorded sale might still just be the bank taking it back because the sale was recorded so quickly. The Highlander house wasn't listed on the MLS, so it might just be the bank taking it back, or a non-hands off transaction. The Bahia and Spruce houses look like real sales, plus both are five bedrooms and would rent for more.
FairEconomist_IHB
New member
The HOA on the Redfin link was $240, which is reasonable for a old condo, although a substantial part of the rent (about 20%).
Geotpf_IHB
New member
FairEconomist said:
Properties with HOAs (or Mello Roos or other special taxes) do eat up quite a bit of the profit. The Riverside houses I listed don't have HOA fees and are old enough that they probably don't have Mello Roos or the like either.
graphrix_IHB
New member
Geotpf said:
Since you mention UCR, do you think you would rent to college students? Have you ever been a landlord, and if you have, have you ever rented to college students?
xoneinax_IHB
New member
The ones on Lyon are even cheaper. And IIRC teens would attend Foothill High School with an API of 834.SoCal78 said:
irvine_home_owner_IHB
New member
I don't rent a condo to students (which according to NewSkip, has little to no maintenance)... but I rent a small home to them and cleaning, re-painting, steaming the carpets and fixing all the little nicks is a HUGE pain.graphrix said:
No matter how old or new or what type of home it is... dirt, wear and tear has a cost to remedy too.
So I would be hesitant to rent TWO places to college students... ONE is already way too much of a headache for me.
no_vaseline_IHB
New member
Have you considered doing your Riverside SFR as a weekly vacation rental? You know, we're pretty close to Disneyland.
Sunshine_IHB
New member
no_vaseline said:
No way! Sought after vacation rentals are in Fullerton.
Geotpf_IHB
New member
irvine_home_owner said:
I can imagine how that college rentals have more maintenance (and vacancies) than long term, stable tenants. It's likely that rentals in college areas have higher GRMs to make up for that, however.
graphrix_IHB
New member
Geotpf said:
The GRMs do not make up for it... EVER! This is why I asked you if you have ever been a landlord, because you would know that renting to college kids in a college town is about as smart as investing in pets.com. The GRMs never make up for the 3 months of vacancies you have per year plus the clean up costs. A good RE investor knows that the value of the GRM is nothing compared to the value of a quality long term tenant.
buylowsellhigh_IHB
New member
Renting to college students is fine as long as you know what is involved with the before/after. Knowing that they are not around during the summer, and the fact that homeowners dont really like to rent to college students, they can also pay a bit more. Just remember that they look at a unit based on the # and size of bedrooms more so than the size of common area such as living room.
Back to the subject, my relatives have a home in a nicer part of riverside near the airbase... 4BR SFR ~1900sqft, today's value ~$250k. The prior tenants paid $1800 after paying for lawn care. They have a management company looking for new tenant at the moment, and depending on what kind of leads they get and how fast it takes to get this home leased, it might be a good idea to look at riverside as investment potential...
Back to the subject, my relatives have a home in a nicer part of riverside near the airbase... 4BR SFR ~1900sqft, today's value ~$250k. The prior tenants paid $1800 after paying for lawn care. They have a management company looking for new tenant at the moment, and depending on what kind of leads they get and how fast it takes to get this home leased, it might be a good idea to look at riverside as investment potential...
irvine_home_owner_IHB
New member
One myth about renting to college students I would like to address:
There is no summer vacancy issue.
A 1-year lease is a 1-year lease and if they aren't around in the summer, they still have to pay the rent. For the 3 sets of students I've rented to in the past years, all of them were 1 or more year leases and at most, I've had a 15-day vacancy between them due to having to clean and prep the house. The one problem is that during the summer, if you happen to visit, you'll see people "living" there that weren't on the original lease but sometimes it's better to ignore that breach in order to get paid.
The biggest issue to me is that the house really does get trashed because 1. They don't clean and 2. They don't maintain.
It's easy enough to find student renters in a college town... just dealing with the headaches/issues/neighbor complaints makes it less desireable.
There is no summer vacancy issue.
A 1-year lease is a 1-year lease and if they aren't around in the summer, they still have to pay the rent. For the 3 sets of students I've rented to in the past years, all of them were 1 or more year leases and at most, I've had a 15-day vacancy between them due to having to clean and prep the house. The one problem is that during the summer, if you happen to visit, you'll see people "living" there that weren't on the original lease but sometimes it's better to ignore that breach in order to get paid.
The biggest issue to me is that the house really does get trashed because 1. They don't clean and 2. They don't maintain.
It's easy enough to find student renters in a college town... just dealing with the headaches/issues/neighbor complaints makes it less desireable.
graphrix_IHB
New member
irvine_home_owner said:
Loaded questions (but not pointed at you because I think you will see where I am going with this): You have had 3 sets of students over the past few years. How many years? What is the turnover like with students? How often do they renew the lease? How many years have you had your rental, and how many different tenants have you had? By what percentage have you increased the lease by when you have needed a new tenant (if you want to give specifics that would be awesome, but I understand if you don't)? What is the typical cost to clean up after a tenant leaves?
Let me know if I am getting too
irvine_home_owner_IHB
New member
2 were 1-year leases and 1 was a 2-year lease.
Each year was at least 5% higher than the previous, but this year would be lower based on comparables (which goes to my opinion that rents are softening).
Clean-up costs varied but minimum was at least $400 for carpet cleaning, cleaning service, paint and maintenance issues. One particular group lost their entire deposit because they ruined flooring in an area of the house.
I always hated the in-between tenants because I would spend days/weeks getting the place ready for show. Luckily, one of the transitions was fairly quick as they rented right after the previous tenant but they seemed to be a bit on the shady side since they were so rushed to take the place. They always paid but after the move-out, it was evident that they didn't take care of the place very well and the neighbors had more complaints about them than any of the other groups.
I'll probably talk more about this later but I've grown tired of being a landlord... at least to students.
Each year was at least 5% higher than the previous, but this year would be lower based on comparables (which goes to my opinion that rents are softening).
Clean-up costs varied but minimum was at least $400 for carpet cleaning, cleaning service, paint and maintenance issues. One particular group lost their entire deposit because they ruined flooring in an area of the house.
I always hated the in-between tenants because I would spend days/weeks getting the place ready for show. Luckily, one of the transitions was fairly quick as they rented right after the previous tenant but they seemed to be a bit on the shady side since they were so rushed to take the place. They always paid but after the move-out, it was evident that they didn't take care of the place very well and the neighbors had more complaints about them than any of the other groups.
I'll probably talk more about this later but I've grown tired of being a landlord... at least to students.
buylowsellhigh_IHB
New member
You would definitely need the resources to have these turned around quick after move out. Searching and coordinating contractors/cleaning/painters is a huge pain, as is coming on the weekend and volunteering your time to do your own work...
no_vaseline_IHB
New member
Plus, everyone else who is doing student based rentals needs maintance help the same time you do....
usctrojanman29_IHB
New member
If I ever quote a spammer with a link in the post again, the next time graph sees me I give him permission to kick me in my nuts as hard as he can.
no_vaseline_IHB
New member
USCTrojanCPA said:
They get better all the time don't they? Edit your post and pull that link out.
