Where to buy in San Diego

[Peter Shaw]

Hello,

I have never lived in SD area but given the strong High Tech employment market, I want to buy a rental unit. I'm looking for something <500-600K, which will generate decent rental income and will appreciate over time (10-15 years time horizon).

Which neighborhoods should I be looking at? Are there agents who specialize in investment properties? Anyone you've worked with that you would recommend? Any property management company that you'd recommend?

Thanks,

Peter

[Dan H.]

Virtually every area of San Diego has historically outstanding appreciation.   To achieve best cash flow requires identifying gentrifying areas. 

However, the areas that are working class areas provide the best opportunity to cash flow or minimize the negative cash flow. Duplex to quad cash flow in general better than SFR but with SFR there are more opportunities and therefore more opportunities to find an off market property that is significantly below market.

Most of my RE (and all of my recent acquisitions) are in working class areas.  But if I were to looking to make a long term appreciation play I would consider West Chula Vista.  Chula Vista is somewhat unique in the more valuable newer houses are in East Chula vista.  Properties just a few blocks from the bay are reasonable price (for San Diego).  They are older and often have value add opportunities.  If I am correct in 15 or 20 years west Chula Vista will be transformed into a more typical bay side area.  If I am wrong it likely will have the same appreciation as most of the rest of San Diego which has been historically great.  It is like bet on red and win, bet on black and win big.

The caveat is that while San Diego has historical appreciation going back more than 60 years, the appreciation goes in cycles.  Virtually the only people to lose money in San Diego RE are those that sold when the market was depressed.  Most of those people were over leveraged.  Do not be one of those people.