San Diego , CA · Member since 2018 · 3 posts · 0 votes
Hi folks, I need some market comparison advice for a rental property in Central Valley (California.)
Here's my criteria:
$75,000 - $120,000
Cash only (don't want to finance)
Growing area with a strong rental market
Not a fixer-upper
I've done a fair amount of research but am still not sure which city/area in Central Valley is the best investment right now so I can narrow my search down to one or two areas.
After exploring single family homes, I've decided to get a 2 or 3 bedroom condo instead, I don't mind paying HOA fees, and prefer that to having all the maintenance and repair expenses of a SFH. I've bought condos before and did well. I know they tend to have less of a monthly cash flow a because of the HOA, and may not appreciate as much as a house, but I'm ok with that. I just need a good, solid income generator in a growing city.
Would greatly appreciate any guidance on which cities are best, given my critera.
Real Estate Agent · Fresno, CA · Member since 2014 · 367 posts · 174 votes
8y
Hey Chris, good luck with your next out of area purchase! Your price range is pretty good for Fresno and Clovis condos, especially on the northwest side of town and mid-clovis, which are really good areas. I'm happy to talk if you have further questions about the area. Let me know if you want to set up a time to chat.
Bakersfield, CA · Member since 2016 · 378 posts · 307 votes
8y
Bakersfield is a great place for what you're looking for. I know you've had good luck before with condos, but the HOA fees can be high and during vacancies you still have to pay it, so I'm not a big fan myself. You can find SFRs and duplexes in that price range in Bakersfield.
Real Estate Agent · Fresno, CA · Member since 2014 · 367 posts · 174 votes
8y
Hey Chris, good luck with your next out of area purchase! Your price range is pretty good for Fresno and Clovis condos, especially on the northwest side of town and mid-clovis, which are really good areas. I'm happy to talk if you have further questions about the area. Let me know if you want to set up a time to chat.
Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
8y
I have no horse in this race, but I've always been more fond of Fresno and especially Clovis because I believe that they are more essential to their surrounding cities than Bakersfield is.
Investor · Bakersfield, CA · Member since 2015 · 483 posts · 234 votes
8y
@Chris Huntington thanks for your question! Given your criteria, if you are looking to stay in state, I think your assumption of Central Valley is correct. From there I think you have a few options:
- Go to a small surrounding city of Bakersfield, and pick up a property which will cash flow. Cash flow that property until you can't anymore and exchange it for a new one.
- Pick a property in Bakersfield proper, which will cash flow. Cash flow that property, and take some possible appreciation (depending on the hold timeline). When you're done, exchange to the next property.
- Pick a property in Northern Central Valley, based on the same criteria as option 1 and 2.
The question is, what neighborhood are you willing to invest in? With that purchase price, you will not be in the best of neighborhoods in Bakersfield, Fresno or any other bigger city. Even if you look into the smaller cities, those prices are coming up which will probably mean being in Aca marginal neighborhood there as well.
As far as South Central Valley v. North Central Valley, I think South Central Valley has much more potential. We have Tejon Ranch which has started developing commercial/industrial properties, and is working on residential development as well. There are two of the largest commercial developments in Bakersfield history starting within the next year. Bakersfield has been the next chosen hub of transportation in CA because of its proximity to the entire CA population, and there are a few more reasons to give it a shot.
Hopefully this helps. If you have any questions, feel free to PM me and we can dig deeper.
Patterson, CA · Member since 2017 · 23 posts · 10 votes
8y
Fresno has the Lowest High school graduation rate in California . It also has a Major Meth problem one of the worst cities in California. Stay away. Stockton or Modesto is better. Stockton has lower prices then Modesto. Modesto is getting refugees from the SF bay area housing / rental crisis. San Jose is in a total housing bubble. Rents because of the limited housing and massive amount of silicone valley technology work have driven rent to some of the highest in the world and the nation. Thousands have fled east and into the valley and many more have taken on room mates or worse. Rents are up at least 30% in the last 2 years in Modesto because of this migration out of the bay. Finding a 1% rental deal is not easy but can be done and I recommend to stay away from condos when in the rental cash flow business. A good PM will take care of all that for you.
Flipper/Rehabber · Lake Isabella, CA · Member since 2011 · 969 posts · 488 votes
8y
Bakersfield definitely fits your criteria very well. I work in Bakersfield a couple days a week and I am still impressed with the deals I see folks getting. The area is growing and the jobs that are in Bakersfield have to be in Bakersfield (oil, ag, logistics/transportation....are all location specific).
I would also consider adding Ridgecrest CA to that list. The base is hiring and there is a shortage of rental housing. The risk is that is more of a single industry town, being very reliant on the base.
As mentioned by others, regardless of which area you are looking, you will likely be looking at C class in that price range.
Another thing to consider with condos is that HOA fees are not the only negatives. Special assessments can be crippling. The other issue is that rules can change on a whim. With a single family house, you have a lot more control then when you are subject to the rulings from an association board.