Best areas for SFH investment property

[Avid Najdahmadi]

Hi,

I am relatively new to San Diego (1.5 years) and I moved here for a biotech job, first high paying job after university:D. Planing to buy a SFH to rent out and create cashflow. Any suggestion on what locations are best, in terms of (1) cash flow, (2) appreciation and (3) tenants? I am particularly looking into Mira Mesa since its closer to my work in Sorrento Valley and seems like a very decent place. Any help or suggestions will be greatly appreciated!

Thanks

[Adit S.]

1. Cash Flow - Contrary to popular belief, it's possible in SD if you find assets that have room to add value. ADUs are a blessing and as Dan mentioned, most places can support a JADU as well if you're living there. If you're open to it - scoop up a discounted place that needs some work and has room to add an ADU or 2.

2. Appreciation - If you check out the community plan for each area in San Diego (In SD, we have a city planning commission and each community/area has it's own community planning group) you can get a sense of what direction an area is headed. Some might argue that buying strictly for appreciation or guess where the path of progress may be is highly speculative, however, in San Diego, there are clear indicators in some areas that a massive upswing is inevitable. Become familiar with those areas and you'll see what I'm talking about. 

3. Tenants - there's something interesting going on in San Diego right now. I help a local developer manage around 40 doors in all types of areas (From North Park to Southeast San Diego) I've noticed that there's a shift happening in a lot of areas - we are seeing more people escape the beaches and downtown and move to places like Linda Vista. I leased up a software professional from Lake Murray (affluent) to City Heights (blue-collar) area - people are going where the rents are lower and we're seeing more socio-economic diversity in the lower-priced/blue-collar area. That being said, I think you can find great tenants in any area and any demographic if you focus on matching the right people with the right home. We've leased to people with shaky credit or background because they seemed genuine and felt excited about the space and had zero issues. We've also leased to people with excellent credit and income and they ended up causing us headaches. I am a firm believer that personality and compatibility with the home are huge when screening tenants. 

Really hope that's helpful and can't wait to hear more about your journey!