Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Rental real estate in California
Old 05-21-2018, 02:13 PM   #1
Dryer sheet aficionado
Mark24609's Avatar
 
Join Date: Feb 2012
Location: Newark
Posts: 45
Rental real estate in California

I was looking at a way to diversify my portfolio. I was looking at Rental Real Estate but I am holding off for now. There is a measure on the Nov ballot to repeal the Costa Hawkins Housing Act. If it passes you will see rent control all over California. Anyone own rental property in California and if so, what are you planning to do?
__________________

Mark24609 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 05-21-2018, 04:38 PM   #2
Confused about dryer sheets
 
Join Date: May 2018
Location: Paso Robles
Posts: 2
I own three rental properties in California and I was not aware of this measure. I just read about it and I am planning to do..nothing, beside voting against it in November. I have had very stable tenants by charging fair rents and I don't see this measure having an impact on my rental properties.
__________________

TheBoldChicken is offline   Reply With Quote
Old 05-21-2018, 04:42 PM   #3
Dryer sheet aficionado
Mark24609's Avatar
 
Join Date: Feb 2012
Location: Newark
Posts: 45
Aw that’s good to know. What cities are they in?
Mark24609 is offline   Reply With Quote
Old 05-21-2018, 04:45 PM   #4
Confused about dryer sheets
 
Join Date: May 2018
Location: Paso Robles
Posts: 2
Paso Robles and Atascadero.
TheBoldChicken is offline   Reply With Quote
Old 05-21-2018, 04:57 PM   #5
Full time employment: Posting here.
 
Join Date: Mar 2013
Location: Coronado
Posts: 687
We own one rental unit in Coronado. We are not taking any action, as even if Costa-Hawkins is repealed, there is practically no chance that rent control would be implemented here.
cathy63 is offline   Reply With Quote
Old 05-21-2018, 05:25 PM   #6
Moderator
rodi's Avatar
 
Join Date: Apr 2012
Location: San Diego
Posts: 9,390
We have a granny flat rental. (1br detached on the same lot as our primary). I plan to do nothing. We have very stable tenants (coming up on 4 years) and don't raise their rent a lot along the way.

I don't think I'd do anything.

I can see how if one were looking to invest in rental purchases it could be a consideration... but it isn't a factor in what we already have. I doubt any imposed rent control wouldn't effect our income too much since we already charge less than full market in exchange for having great tenants.
__________________
Retired June 2014. No longer an enginerd - now I'm just a nerd.
micro pensions 7%, rental income 18%
rodi is offline   Reply With Quote
Old 05-21-2018, 06:38 PM   #7
Thinks s/he gets paid by the post
Huston55's Avatar
 
Join Date: Jul 2011
Location: The Bay Area
Posts: 2,035
Quote:
Originally Posted by Mark24609 View Post
I was looking at a way to diversify my portfolio. I was looking at Rental Real Estate but I am holding off for now. There is a measure on the Nov ballot to repeal the Costa Hawkins Housing Act. If it passes you will see rent control all over California. Anyone own rental property in California and if so, what are you planning to do?
If you’re looking in Newark, CA (where you live) or nearby, I think you’ll find rental real estate is a loser at present purchase/rental prices. There are several E-R.org members who have lots more landlord experience than me (Senator comes to mind) who may chime in here but, I personally wouldn’t spend much time looking in the SF Bay Area for profitable rental properties.
__________________
You may be whatever you resolve to be.
Huston55 is offline   Reply With Quote
Old 05-21-2018, 08:54 PM   #8
Dryer sheet aficionado
Mark24609's Avatar
 
Join Date: Feb 2012
Location: Newark
Posts: 45
Quote:
Originally Posted by Huston55 View Post
If you’re looking in Newark, CA (where you live) or nearby, I think you’ll find rental real estate is a loser at present purchase/rental prices. There are several E-R.org members who have lots more landlord experience than me (Senator comes to mind) who may chime in here but, I personally wouldn’t spend much time looking in the SF Bay Area for profitable rental properties.
What my plan was to buy a house near my son in Oakley, Ca which is in the suburbs and rent my house out. My house would rent for 3700 a month. Houss here have passed the million dollar mark. Glad I purchased when I did. It’s because we are in the center of Silicon Valley, and Fremont is even more expensive so they come here to buy. Open houses get 55 people a day coming through. I can buy a house for half the price in Oakley.
Mark24609 is offline   Reply With Quote
Old 05-21-2018, 09:33 PM   #9
Thinks s/he gets paid by the post
Huston55's Avatar
 
Join Date: Jul 2011
Location: The Bay Area
Posts: 2,035
Quote:
Originally Posted by Mark24609 View Post
What my plan was to buy a house near my son in Oakley, Ca which is in the suburbs and rent my house out. My house would rent for 3700 a month. Houss here have passed the million dollar mark. Glad I purchased when I did. It’s because we are in the center of Silicon Valley, and Fremont is even more expensive so they come here to buy. Open houses get 55 people a day coming through. I can buy a house for half the price in Oakley.
Understood.

Don’t forget the opportunity cost when analyzing this move. In your situation, you’re likely have have $1M+ in equity in your current house, and there’s a cost for not capturing & earning a return on it. I don’t know your precise numbers but, median rent in Oakley, CA is $2,400/mo. If you get $3,700/mo for your current place & leave $1M of (dead) equity sitting in it as a rental, you’re $1,200/mo worse off @ a 3% return [$3,700-$2,400-($1M*.03/12)= -$1,200/mo]. I know Prop 13 & 60 can make a difference in such situations but, my point is to not forget that the opportunity cost of the equity in your current house is real.

Just as an aside, there are TON of foreclosures in Oakley (on Zillow). I’m not sure why. You probably know but, it’s worth investigating.
__________________
You may be whatever you resolve to be.
Huston55 is offline   Reply With Quote
Old 05-21-2018, 10:42 PM   #10
Dryer sheet aficionado
Mark24609's Avatar
 
Join Date: Feb 2012
Location: Newark
Posts: 45
That’s a good point. I will have to think about it. I thought about buying two properties in Oakley which might be better. Of course than increased property taxes but maybe the rent on the one would cover that. If I did that I wouldn’t have to spend down my current portfolio
Mark24609 is offline   Reply With Quote
Old 05-21-2018, 10:44 PM   #11
Dryer sheet aficionado
Mark24609's Avatar
 
Join Date: Feb 2012
Location: Newark
Posts: 45
I will have to check out the foreclosures. I was unaware of that. I helped my son buy his house there, and he bought at the very low, and it’s almost doubled in price since his purchase
Mark24609 is offline   Reply With Quote
Old 05-22-2018, 07:28 AM   #12
Thinks s/he gets paid by the post
 
Join Date: Jan 2013
Posts: 1,335
Quote:
Originally Posted by Huston55 View Post
Understood.

Don’t forget the opportunity cost when analyzing this move. In your situation, you’re likely have have $1M+ in equity in your current house, and there’s a cost for not capturing & earning a return on it. I don’t know your precise numbers but, median rent in Oakley, CA is $2,400/mo. If you get $3,700/mo for your current place & leave $1M of (dead) equity sitting in it as a rental, you’re $1,200/mo worse off @ a 3% return [$3,700-$2,400-($1M*.03/12)= -$1,200/mo]. I know Prop 13 & 60 can make a difference in such situations but, my point is to not forget that the opportunity cost of the equity in your current house is real.

Just as an aside, there are TON of foreclosures in Oakley (on Zillow). I’m not sure why. You probably know but, it’s worth investigating.
I don't see the foreclosures that you do. There are very few actual foreclosures for sale. There are some potential foreclosures, most of which are defaults that will be cured.

Oakley is not a place I would invest. It's one of those places that is on the edge of both the Central Valley and the Bay Area. People buy in Oakley when they are priced out of the Bay Area. These markets drop in value when the Bay Area markets soften. Quality renters with good jobs in the Bay Area will pay a few dollars more to live closer to their jobs. Outer ring cities get the people that can't compete for closer in rentals for whatever reason. People will drive to buy, but not to rent.

In your shoes, I would stay in Fremont/Newark if you are happy there. When real estate markets drop, you could always pull some remaining equity out of your house and buy a rental in a place that makes sense to own rentals.
Another Reader is online now   Reply With Quote
Old 05-22-2018, 08:56 AM   #13
Thinks s/he gets paid by the post
Huston55's Avatar
 
Join Date: Jul 2011
Location: The Bay Area
Posts: 2,035
Quote:
Originally Posted by Another Reader View Post
I don't see the foreclosures that you do. There are very few actual foreclosures for sale. There are some potential foreclosures, most of which are defaults that will be cured.
Correct, most of the listing are ‘pre-foreclosures’, along with several actual ‘foreclosures.’ More than half of the “For Sale” listing are ‘pre-foreclosures’, which seems alarming to me.


Quote:
Originally Posted by Another Reader View Post
Oakley is not a place I would invest. It's one of those places that is on the edge of both the Central Valley and the Bay Area. People buy in Oakley when they are priced out of the Bay Area. These markets drop in value when the Bay Area markets soften. Quality renters with good jobs in the Bay Area will pay a few dollars more to live closer to their jobs. Outer ring cities get the people that can't compete for closer in rentals for whatever reason. People will drive to buy, but not to rent.
Absolutely agree with this.
__________________
You may be whatever you resolve to be.
Huston55 is offline   Reply With Quote
Old 05-22-2018, 09:00 AM   #14
Full time employment: Posting here.
97guns's Avatar
 
Join Date: Nov 2011
Location: The Deep South Bay
Posts: 526
Oakley is a safe bet because of the proximity to the Bay Area and that means work! Where there’s work there is strong rental markets
__________________
Fired at 39 in 2009 with less than $300k in total net worth, current net worth 1.7mil
97guns is offline   Reply With Quote
Old 05-22-2018, 09:50 AM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 5,626
The real estate prices in the outer suburbs like Oakley and Brentwood really crashed hard in the last recession. I'm not into rentals, but we thought about moving out there at one time - large brand new homes, some on golf courses, were going for around $200K. It would have been like retiring to a lower cost of living area with only being an hour or so out from SF (non rush hour).
__________________

__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
daylatedollarshort is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Prediction: California Real Estate Sam Other topics 136 01-15-2009 10:44 PM
Real Estate Agent in Down Real Estate Market TromboneAl Other topics 4 06-09-2007 10:20 AM
book suggestions on buying rental real estate? madrone FIRE and Money 27 01-27-2006 12:20 PM

 

 
All times are GMT -6. The time now is 06:07 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2018, vBulletin Solutions, Inc.