Starting out in San Diego

[Matthew Roberts]

Getting eager to being investing and I'd feel more comfortable doing a long-term rental somewhere nearby. With that said I think we have to be close to a housing peak here in San Diego. I feel like San Diego is "un-investable" for someone with limited education like myself. Should I look elsewhere or just build more cash and wait it out?

[Dan H.]

I do not know if we are at the price peak but what I do know is

1) the peak is very hard to predict

2) virtually every past peak in San Diego would seem like a value today

3) That rents typically lag property appreciation,  That combined with the current rental shortage and wising minimum wage make it seem highly likely that San Diego rents will appreciate for quite a while.

4) I recommend all newbies start local, self managed, ideally house hacking.  The local and self managed is primarily for the learning opportunities.  Local is where your expertise is and requires less trust of your team.  Those learning opportunities can be leveraged later to prepare you for bigger and better RE investments (either local or non-local).

I purchased near market highs in 1993 and 2004 (both purchases were down near 20% at one time).  Both those purchases look great today.  Make sure you are not over extended and need to sell when the market is depressed and you will likely have a successful investment even if purchased at a market peak.

Good luck