Investing in Furnished Rentals in San Luis Obispo

[Ron Zinger]

Hello,

While I have invested in rentals (and AirBnB) in few locations (AZ, CA East Bay, NV) I am new to BiggerPockets. I am looking into investing in San Luis Obispo (called also SLO), buying a nice single family home 3br / 3 ba about $1,700 sq feet (for $800K - $850K) and use it for 1-2 months per year as 2nd / vacation home. While I am not using it, I plan to lease it as furnished for short durations (1-9 months). Would appreciate any information about rental market in SLO, how much I can get for furnished and none furnished (year lease), occupancy rate, etc. I am OK also with lower CAP (hopefully 4%) as I am also using it for 2nd home.

Thank you and Merry Christmas / Happy Holidays! 

-Ron

[Owen Schwaegerle]

Hi Ron, I'm very familiar with the SLO real estate market. We live in SLO and manage rental property in town as well throughout the county. The great thing about SLO is that the vacancy rate is extremely low, typically about 2-3% due to the college. About 65% of the homes in SLO are rentals, so there is a very high demand for rental housing. The rents are going to vary by location. If it is closer to Cal Poly, a good rule of thumb is that you can get about $1,000/bedroom/mo. That would mean you could get $3,000/mo for a 3 bed. An idea to add value to an SFR would be to convert the garage into an ADU, or put an ADU in the back yard. That way you could come visit anytime by keeping the ADU available for yourself while renting out the main house for consistent income.

If the home is furnished, you can typically get 15 to 20 percent more for a furnished long-term rental. More on that in this article by Cozy https://www.landlordology.com/...

Hope this helps! If you ever need anything I'm always happy to take a call or connect again!