Buy and Hold property advise!!!

[Bhavna Chopra]

Hi Everyone,

   I am a new member from Dublin CA. My husband and I are planning to buy our 1st investment/ rental property in the East Bay area and are looking for some advise.  Our budget is around $500K ( Looking for town homes/condos) with 25% down. We had some basic questions as we have no experience in this domain. 

1) Can you please suggest good areas for investment around Dublin CA within the 50 mile radius?

2) How do you calculate the monthly cash flow earned from the property?

3) How we calculate/ estimate the long-term return on investment on the property?

4) Debating whether it is better to buy 1b/1b v/s 2b/2b from an investment standpoint?

Appreciate the advise.

Thanks,

Bhavna Chopra

[J. Martin]

Originally posted by @Bhavna Chopra:

Hi Everyone,

   I am a new member from Dublin CA. My husband and I are planning to buy our 1st investment/ rental property in the East Bay area and are looking for some advise.  Our budget is around $500K ( Looking for town homes/condos) with 25% down. We had some basic questions as we have no experience in this domain. 

1) Can you please suggest good areas for investment around Dublin CA within the 50 mile radius?

2) How do you calculate the monthly cash flow earned from the property?

3) How we calculate/ estimate the long-term return on investment on the property?

4) Debating whether it is better to buy 1b/1b v/s 2b/2b from an investment standpoint?

Appreciate the advise.

Thanks,

Bhavna Chopra

Bhavna, I will already tell you you're going to get two wildly different styles of answers here. A bunch of people that tell you that you need to take your cash out of state and buy 100 single family homes, and many locals who will tell you not to touch those with a 10 foot pole. 

Typically, most investors do not buy condos and townhouses as investment properties. This was quite an exception during the downturn, as condos were beat down low. They have a lot of price volatility. Maybe @Sandeep S. or @David C. will tell you 10% appreciation or so.. ?

4) 1/1 will typically have more turnover as people "grow out" of it due to life changes, etc. Check out citydata.com to see the distribution of household sizes and unit sizes (bedrooms, etc) in Dublin. This might give you some insight..

5) You didn't ask but you MUST MUST MUST check the CC&R's (Conditions, Covenants & Restrictions) before buying a condo - especially to rent out. There will often be a restriction regarding if you can rent at all, the % of units in the complex that can be rented, or HOA approval of renter, or none at all.. Know before you buy!!!

Good luck!

PS. A few months ago, I bought a 4plex in Oakland that produces over $5k+/mo in rents ($60K+yr). Guess how much I paid for it..?