Investing in Folsom vs Roseville vs Rocklin

[Ramki D.]

Hello all.. I am planning to buy rental property in Folsom ranch. I went there yesterday and saw couple of homes (kb homes, lennar, tripointe near to future dignity health). 3 bed and 2 bath approximately1638 sq ft around 600k. With this price there is no +ve cash flow (20% down payment and 3k rental per month). Since these homes are near to Intel and close proximity of dignity health center which will open in 2023 (hopefully will have good demand for rental). My goal property appreciation., is it good idea to buy it in Folsom? Or better to invest in Rocklin/Roseville/elk elk Grove?. I am already working with realtor and looking for others suggestions. Thanks in advance.

[Matt Loeffler]

Buying a rental in Folsom is good in the sense that it would be considered an A class neighborhood so you should have a quality tenant who pays consistently and keeps the place fairly clean. However, the financials of it will never pencil out as something a career investor would take on because you’ll be significantly cash flow negative. An appreciation only strategy is a bit risky with the current high inflation and likely downturn ahead. If you have a 10+ year hold plan then you’ll likely be ok but you’ll be shelling out cash every month to meet the mortgage payment in the meantime. Roseville, Rocklin and Elk Grove would be the same. With today’s prices especially in CA, it’s very difficult to find something that would cash flow. You have to be very creative.