For whatever reason, there will come a time when you will sell your property. When it comes to selling, there are two choices. One is to hire a real estate agent to list and market your property. The other option is to sell it yourself. I do not have experience doing the latter but the influx of tools such as redfin.com and zillow.com are making me consider selling without a listing agent in the future.
Let me start by saying that some real estate agents provide value and work diligently to make the sale as smooth as possible. But any homeowner has to keep in mind that while the listing agent ostensibly represents his client, his personal interests come first. That's natural and completely understandable. But as a homeowner looking to sell, you must educate yourself in addition to the information given from a biased party.
Here are some nuggets of wisdom from my most recent dealings with a listing agent:
1. The agent presented "comps" from 3 months prior to benchmark what my home was worth. But I was selling in a rising market and felt that the comps were already outdated. Always do your own benchmarking with tools from websites such as redfin.com (if it serves your location)
2. The agent wanted to list my investment unit for $260,000. I felt I had a more accurate pulse on this particular market. I thought that $285,000 was more than reasonable based on my own research. The agent said that a similar unit sold for $260,000. I said that unit was 100 sq ft. smaller and faced a busy street. An agent would rather get a quick sale, even if it's under market value. $20k to $30k does not make much of a difference in the agent's commission but it will make a BIG difference in your bottom line. My home ended up selling for $293,000 with multiple offers on the first week. The market sets the price, not the agent.
3. The agent asks how urgently you have to sell. There are good reasons why your agent would ask, but I would generally advise you not to lay all of your cards on the table. If the agent knows you are a "motivated" seller then guess what? They will let the buyers know. Remember, what you say can and will be used against you.
4. I would never pay more than 5% commission on both buyer's agent and listing agent combined. But I don't advise to shoot for 3.5% combined because the agent on the buyer's side will not have much of an incentive to take their client to your home. 2.5% per side is more than reasonable, and be sure to have the listing agent include complementary professional photography to list your home.
Wednesday, November 28, 2012
Monday, November 26, 2012
My Condo Investment Criteria
The bulk of your short term profits/losses will take place at the time you purchase your investment property. I've established a set of criteria with conditions to be met prior to my investment.
1. Rental parity - Will my monthly mortgage/taxes/HOA dues undercut the rental market, and if so, would it be enough to cover projected vacancies and maintenance? This is the first and most important factor to consider.
2. Building age - I only purchase units built after 1970. There is no precise science to this, but based on my observations on plumbing and electrical problems with older buildings.
3. HOA matters - Your investment will be in jeopardy if the HOA's finances are in peril, or if the HOA enters litigation. If an HOA is under litigation, then most lenders will not finance purchases of units under that HOA (in other words, cash only). This drops the price of each unit tremendously. Conversely, if you have the cash, you may WANT to purchase a condo under HOA litigation because once the lawsuit ends you may profit handsomely from a sudden spike in values.
4. Nearby primary residence - While I outsource the majority of maintenance issues, there are times where my direct involvement is necessary.
5. Would I want to live there myself? - I only invest in areas where I can envision a family member living in my unit if I decide to step away from the landlord business. This means a safe area, decent neighborhood aesthetics, and good schools. Whether the housing market booms or busts, a place to live in a safe area will ALWAYS be useful.
6. Regulatory climate - I only invest in areas where there is no rent control, no section 8 housing, and a legal environment where the courts do not predominantly view the tenants as the victims. I am by no means elitist and I hope it doesn't sound that way, but that is the honest truth. I know many well-intentioned landlords who have been ruined by bad tenants and courts that see them as slumlords despite receiving no rent for months. I want the world to be an affordable place to live, but rent control and section 8 do not really alleviate this issue and usually results in neighborhoods that get worse over time.
1. Rental parity - Will my monthly mortgage/taxes/HOA dues undercut the rental market, and if so, would it be enough to cover projected vacancies and maintenance? This is the first and most important factor to consider.
2. Building age - I only purchase units built after 1970. There is no precise science to this, but based on my observations on plumbing and electrical problems with older buildings.
3. HOA matters - Your investment will be in jeopardy if the HOA's finances are in peril, or if the HOA enters litigation. If an HOA is under litigation, then most lenders will not finance purchases of units under that HOA (in other words, cash only). This drops the price of each unit tremendously. Conversely, if you have the cash, you may WANT to purchase a condo under HOA litigation because once the lawsuit ends you may profit handsomely from a sudden spike in values.
4. Nearby primary residence - While I outsource the majority of maintenance issues, there are times where my direct involvement is necessary.
5. Would I want to live there myself? - I only invest in areas where I can envision a family member living in my unit if I decide to step away from the landlord business. This means a safe area, decent neighborhood aesthetics, and good schools. Whether the housing market booms or busts, a place to live in a safe area will ALWAYS be useful.
6. Regulatory climate - I only invest in areas where there is no rent control, no section 8 housing, and a legal environment where the courts do not predominantly view the tenants as the victims. I am by no means elitist and I hope it doesn't sound that way, but that is the honest truth. I know many well-intentioned landlords who have been ruined by bad tenants and courts that see them as slumlords despite receiving no rent for months. I want the world to be an affordable place to live, but rent control and section 8 do not really alleviate this issue and usually results in neighborhoods that get worse over time.
Monday, June 4, 2012
Laguna Niguel = Prime Location
Address: 30902 Clubhouse Dr. 13A, Laguna Niguel
Bedrooms: 2
Bathrooms: 2
Size: 1,059 sq. ft
Laguna Niguel is a family friendly bedroom community in south Orange County. This particular property is located roughly 2 miles from the ocean. The city is well-manicured, and the good schools, public safety, and proximity to upscale ocean resorts such as the Ritz Carlton and the St. Regis indicate an affluent demographic in this area.
The La Vista complex at Laguna Niguel was one that was hit hard by the recession, primarily because these went on sale at the peak of the housing bubble and speculators bailed out when the market tanked. On the bright side, that has resulted in opportunities for current buyers. Photos and the calculated breakdown are as follows:
The ROI on the down payment of $42,000 is estimated at a shade less than 8%. But keep in mind that that figure does not take into account gains made on principle via monthly mortgage payments.
Bedrooms: 2
Bathrooms: 2
Size: 1,059 sq. ft
Laguna Niguel is a family friendly bedroom community in south Orange County. This particular property is located roughly 2 miles from the ocean. The city is well-manicured, and the good schools, public safety, and proximity to upscale ocean resorts such as the Ritz Carlton and the St. Regis indicate an affluent demographic in this area.
The La Vista complex at Laguna Niguel was one that was hit hard by the recession, primarily because these went on sale at the peak of the housing bubble and speculators bailed out when the market tanked. On the bright side, that has resulted in opportunities for current buyers. Photos and the calculated breakdown are as follows:
The ROI on the down payment of $42,000 is estimated at a shade less than 8%. But keep in mind that that figure does not take into account gains made on principle via monthly mortgage payments.
Listing price: $210,000
Down payment (20%): $42,000
Expected monthly rental income (based on Zillow.com rent estimate): $1,786
Monthly mortgage (30 year fixed @ 3.75%): $778
Monthly maintenance and repair budget: $100
Monthly vacancy budget: $100
Monthly HOA dues: $352
Monthly property tax: $183.75
----
Monthly profit: $272.25
Monthly profit: $272.25
Annual return on down payment investment (not including mortgage principal gain) : 7.8%
Sunday, May 6, 2012
My own eviction story
CalculatedCondo is filled with posts on potentially good condo investments. However, keep in mind that being an investor and landlord takes plenty of work on its own. There is usually no such thing as easy money, and even a prudent real estate investment will prove to be the same.
I am a landlord of condominium units in both LA and OC. Some properties were purchased on the cheap whereas others, not so much. It took me a few years to work out the finances to make sure my properties were generating positive cash flow. But even with positive cash flow there are pitfalls. The greatest pitfall is a bad tenant.
I've managed more than a dozen tenants during my ongoing stint as a landlord. But 2010 was the first where I grew complacent on having reliable tenants, so I did the unthinkable: I did not do a thorough background check on a prospective tenant.
This rental applicant was the head of a household. I had a soft side for families with young children so I gave them extra consideration. And frankly, the rental market was soft at the time so I did not have a good pool of applicants to choose from. The monthly rent I asked for was well below comps. He came with his wife and two young children. While he was pleasant and generally seemed like a decent person, I had that strange "gut feeling" that this wouldn't work out. But I gave them the benefit of the doubt. Here were the warning signs early on:
1. They wanted the place ASAP
2. They were initially reluctant to show a photo ID
3. They initially left the social security number on the rental application blank
4. Their reported income was too low for the monthly rent, but they assured me that they did freelance work on the side that would double their reported income
5. Their previous landlord did not return my calls
The problems started only three months after they moved in. I had to constantly remind them to pay their rent and they presented the following excuses that are not unique amongst insolvent tenants:
1. They moved jobs and have a brand new pay schedule
2. They had an unforeseen medical/car repair expense
3. They "lost their phone" and found it after a week
A landlord has to walk that fine line between maintaining a landlord/tenant relationship and becoming more "businesslike" and post the 3 day notice to perform or quit. After six months, I decided on the latter. When they received the 3 day notice, they promptly called me; not to pay the past due rent, but to complain about repairs. Here are signs that you REALLY have trouble in your hands.
1. The tenant goes on the offensive after the 3 day notice rather than giving payment
2. The tenant contacts local housing authorities for repairs that were not brought to your attention before
3. The tenant seems to know the housing codes that he can use against you, even if you were clearly acting in good faith and you were quick to answer maintenance requests
4. The tenant also seems to know the eviction procedures
The tenant said the heater was not working and said that therefore, according to local housing codes, the unit was not habitable. I got that. But I told the tenant that if they had notified me, it would've been taken care of in a reasonable time. I then received a call from the local authorities (fair housing, city code enforcement, etc) and I told them my side and stuck to it. I could tell by their tone that they sympathized with my situation.
Finally, after 5 weeks since the initial 3 day notice, I went to court to seek an eviction judgment. The tenant was there and told the judge that I was not willing to fix the heater and therefore she caught a cold and missed work, and her children got sick so she incurred additional medical expenses. Through my eviction attorney (professional legal help is highly recommended), we presented evidence via email correspondences that I was acting in good faith and the tenant was not giving me adequate access to the dwelling. After 5 minutes, the judge ruled in my favor. And two weeks after that, the tenant was locked out by the sheriff.
The entire ordeal costed me the following:
lost rent: $3,400
legal fees: $1,100
locksmith: $100
sheriff: $25
---
Total: $4,625
I can't stress enough the importance of doing a thorough background check to protect your investment and your personal health. I was fortunate that the judge ruled in my favor. I was also fortunate that the tenant did not damage the dwelling prior to leaving.
After the eviction, I went on the county superior court website and found out that the tenant that I evicted had a string of eviction records from the previous 5 years. Check your local court websites and access their online case databases prior to signing any lease.
Good luck to all!
I am a landlord of condominium units in both LA and OC. Some properties were purchased on the cheap whereas others, not so much. It took me a few years to work out the finances to make sure my properties were generating positive cash flow. But even with positive cash flow there are pitfalls. The greatest pitfall is a bad tenant.
I've managed more than a dozen tenants during my ongoing stint as a landlord. But 2010 was the first where I grew complacent on having reliable tenants, so I did the unthinkable: I did not do a thorough background check on a prospective tenant.
This rental applicant was the head of a household. I had a soft side for families with young children so I gave them extra consideration. And frankly, the rental market was soft at the time so I did not have a good pool of applicants to choose from. The monthly rent I asked for was well below comps. He came with his wife and two young children. While he was pleasant and generally seemed like a decent person, I had that strange "gut feeling" that this wouldn't work out. But I gave them the benefit of the doubt. Here were the warning signs early on:
1. They wanted the place ASAP
2. They were initially reluctant to show a photo ID
3. They initially left the social security number on the rental application blank
4. Their reported income was too low for the monthly rent, but they assured me that they did freelance work on the side that would double their reported income
5. Their previous landlord did not return my calls
The problems started only three months after they moved in. I had to constantly remind them to pay their rent and they presented the following excuses that are not unique amongst insolvent tenants:
1. They moved jobs and have a brand new pay schedule
2. They had an unforeseen medical/car repair expense
3. They "lost their phone" and found it after a week
A landlord has to walk that fine line between maintaining a landlord/tenant relationship and becoming more "businesslike" and post the 3 day notice to perform or quit. After six months, I decided on the latter. When they received the 3 day notice, they promptly called me; not to pay the past due rent, but to complain about repairs. Here are signs that you REALLY have trouble in your hands.
1. The tenant goes on the offensive after the 3 day notice rather than giving payment
2. The tenant contacts local housing authorities for repairs that were not brought to your attention before
3. The tenant seems to know the housing codes that he can use against you, even if you were clearly acting in good faith and you were quick to answer maintenance requests
4. The tenant also seems to know the eviction procedures
The tenant said the heater was not working and said that therefore, according to local housing codes, the unit was not habitable. I got that. But I told the tenant that if they had notified me, it would've been taken care of in a reasonable time. I then received a call from the local authorities (fair housing, city code enforcement, etc) and I told them my side and stuck to it. I could tell by their tone that they sympathized with my situation.
Finally, after 5 weeks since the initial 3 day notice, I went to court to seek an eviction judgment. The tenant was there and told the judge that I was not willing to fix the heater and therefore she caught a cold and missed work, and her children got sick so she incurred additional medical expenses. Through my eviction attorney (professional legal help is highly recommended), we presented evidence via email correspondences that I was acting in good faith and the tenant was not giving me adequate access to the dwelling. After 5 minutes, the judge ruled in my favor. And two weeks after that, the tenant was locked out by the sheriff.
The entire ordeal costed me the following:
lost rent: $3,400
legal fees: $1,100
locksmith: $100
sheriff: $25
---
Total: $4,625
I can't stress enough the importance of doing a thorough background check to protect your investment and your personal health. I was fortunate that the judge ruled in my favor. I was also fortunate that the tenant did not damage the dwelling prior to leaving.
After the eviction, I went on the county superior court website and found out that the tenant that I evicted had a string of eviction records from the previous 5 years. Check your local court websites and access their online case databases prior to signing any lease.
Good luck to all!
Wednesday, May 2, 2012
Opportunity in Burbank
Address: 1723 Landis St. #204, Burbank, CA
Bedrooms: 2
Bathrooms: 2
Size: 1,064 sq. ft.
Burbank is an upper middle class city in Los Angeles County. It is home to numerous media firms such as Nickelodeon, Disney, and Warner Brothers. It has good public safety ratings and is patrolled with its own dedicated city police. While the schools are not as highly ranked as Arcadia, it is one of the more desirable locations in the county, being within 15 miles of downtown Los Angeles and major employment areas in Glendale and Pasadena.
This condo unit was built in 1993 and appears to be in decent condition. Here are some pictures to give you a visual:
Bedrooms: 2
Bathrooms: 2
Size: 1,064 sq. ft.
Burbank is an upper middle class city in Los Angeles County. It is home to numerous media firms such as Nickelodeon, Disney, and Warner Brothers. It has good public safety ratings and is patrolled with its own dedicated city police. While the schools are not as highly ranked as Arcadia, it is one of the more desirable locations in the county, being within 15 miles of downtown Los Angeles and major employment areas in Glendale and Pasadena.
This condo unit was built in 1993 and appears to be in decent condition. Here are some pictures to give you a visual:
The numbers below indicate a high return on investment. Most portfolio managers wouldn't be able to maintain a 20% ROI year over year. From an investor's perspective, this property makes sense.
Listing price: $156,000
Down payment (20%): $31,200
Expected monthly rental income (based on Zillow.com rent estimate): $1,686
Monthly mortgage (30 year fixed @ 4%): $598
Monthly maintenance and repair budget: $100
Monthly vacancy budget: $100
Monthly HOA dues: $200
Monthly property tax: $175.50
----
Monthly profit: $512.50
Monthly profit: $512.50
Annual return on down payment investment (not including mortgage principal gain) : 20%
Tuesday, May 1, 2012
Bad buy in Torrance
Address: 22821 Nadine Cir. Unit A, Torrance, CA
Bedrooms: 2
Bathrooms: 2
Size: 1,117 sq. ft.
Like Arcadia, Torrance is another upper middle class area with good schools and public safety. Torrance is also located fairly close to the ocean, so temperatures stay mild even during the summer months. Los Angeles and Orange County are both within a 30 minute drive.
But also like Arcadia, this property is an example why the popular mantra, "location location location" doesn't always constitute sound investment advice.The pictures show that the building is on the older side for a condo, but the unit looks clean with an updated kitchen.
..the numbers however, don't look too encouraging.
Bedrooms: 2
Bathrooms: 2
Size: 1,117 sq. ft.
Like Arcadia, Torrance is another upper middle class area with good schools and public safety. Torrance is also located fairly close to the ocean, so temperatures stay mild even during the summer months. Los Angeles and Orange County are both within a 30 minute drive.
But also like Arcadia, this property is an example why the popular mantra, "location location location" doesn't always constitute sound investment advice.The pictures show that the building is on the older side for a condo, but the unit looks clean with an updated kitchen.
..the numbers however, don't look too encouraging.
Listing price: $359,000
Down payment (20%): $71,800
Expected monthly rental income (based on Zillow.com rent estimate): $1885
Monthly mortgage (30 year fixed @ 4%): $1371
Monthly maintenance and repair budget: $100
Monthly vacancy budget: $100
Monthly HOA dues: $269
Monthly property tax: $403.90
----
Monthly loss: $358.89
Monthly loss: $358.89
To make matters worse, this is a senior community so the potential for finding renters is severely limited. With that said, the rent (from Zillow.com) might be optimistic.
A bad investment in Arcadia
Address: 18 Fano St. #6, Arcadia, CA
Bedrooms: 3
Bathrooms: 2.5
Size: 1,801 sq. ft.
Arcadia is an upscale neighborhood that boasts highly ranked schools. But the prestige of the zipcode does not necessarily mean that every property there is a good buy. Arcadia, like some other affluent, well established neighborhoods in Los Angeles county, remain overpriced relative to historical norms. This property on 18 Fano St. was sold for $558,000 at the peak of the housing bubble in 2005, yet it is currently listed for $579,000. Many of the "lesser" neighborhoods in LA and OC have come down roughly 40% from the 2005/2006 peak.
This is a fairly new property that probably won't require as many big ticket repairs as those that are 50 years old, but that does not hide the fact that the numbers just don't add up.
Bedrooms: 3
Bathrooms: 2.5
Size: 1,801 sq. ft.
Arcadia is an upscale neighborhood that boasts highly ranked schools. But the prestige of the zipcode does not necessarily mean that every property there is a good buy. Arcadia, like some other affluent, well established neighborhoods in Los Angeles county, remain overpriced relative to historical norms. This property on 18 Fano St. was sold for $558,000 at the peak of the housing bubble in 2005, yet it is currently listed for $579,000. Many of the "lesser" neighborhoods in LA and OC have come down roughly 40% from the 2005/2006 peak.
This is a fairly new property that probably won't require as many big ticket repairs as those that are 50 years old, but that does not hide the fact that the numbers just don't add up.
Listing price: $579,000
Down payment (20%): $115,800
Expected monthly rental income (based on Zillow.com rent estimate): $2540
Monthly mortgage (30 year fixed @ 3.875%): $2211
Monthly maintenance and repair budget: $100
Monthly vacancy budget: $100
Monthly HOA dues: $150
Monthly property tax: $651.38
----
Monthly loss: $672.38
Monthly loss: $672.38
Monday, April 30, 2012
Check references! Check credit!
There are good and bad tenants, and there are good and bad landlords. If you are the investor and thus the landlord, we will assume that you will act in good faith and practice ethical business practices for your tenants.
But what if you get a bad tenant?
THE most important step of the landlord/tenant relationship is to THOROUGHLY check the background of your rental applicants. If you do not do your due diligence on this critical step then prepare yourself on suffering significant financial losses. If you get a bad tenant then you are at the mercy of California's lengthy eviction process.
Signs of trouble:
- the applicant is reluctant on disclosing the requested information on the application, such as social security number, previous landlord references, etc
- the applicant cannot/refuses to pay for the application fee
- the applicant says that his/her credit score is low, but because they were screwed by a friend or an unfortunate once in a lifetime occurrence is the culprit
- the applicant wants to pay you several months of rent up front in lieu of a rental application/credit check
- your gut tells you something's wrong
But what if you get a bad tenant?
THE most important step of the landlord/tenant relationship is to THOROUGHLY check the background of your rental applicants. If you do not do your due diligence on this critical step then prepare yourself on suffering significant financial losses. If you get a bad tenant then you are at the mercy of California's lengthy eviction process.
Signs of trouble:
- the applicant is reluctant on disclosing the requested information on the application, such as social security number, previous landlord references, etc
- the applicant cannot/refuses to pay for the application fee
- the applicant says that his/her credit score is low, but because they were screwed by a friend or an unfortunate once in a lifetime occurrence is the culprit
- the applicant wants to pay you several months of rent up front in lieu of a rental application/credit check
- your gut tells you something's wrong
Sunday, April 29, 2012
Glendale condo
Address: 501 East Palmer Ave Unit A4, Glendale, CA
Bedrooms: 3
Bathrooms: 2.5
Size: 1,199 sq. ft.
Glendale is an upper middle class suburb in Los Angeles County. It is centrally located, bordering Los Angeles to the south, Burbank to the west and Pasadena to the east. This unit looks like it may require some minor work/cleanup but nothing substantial to make it move in ready.
Bedrooms: 3
Bathrooms: 2.5
Size: 1,199 sq. ft.
Glendale is an upper middle class suburb in Los Angeles County. It is centrally located, bordering Los Angeles to the south, Burbank to the west and Pasadena to the east. This unit looks like it may require some minor work/cleanup but nothing substantial to make it move in ready.
Listing price: $216,000
Down payment (20%): $43,200
Expected monthly rental income (based on Zillow.com rent estimate): $1,850
Monthly mortgage (30 year fixed @ 3.875%): $813
Monthly maintenance and repair budget: $100
Monthly vacancy budget: $100
Monthly HOA dues: $225
Monthly property tax: $243
----
Monthly profit: $369
Monthly profit: $369
Annual return on down payment investment: 10%
Note that the annual return on the down payment investment does not account for any gain in equity via monthly mortgage payments. Adding up the equity makes this an even more attractive purchase from a financial standpoint.
Thursday, April 26, 2012
Mission Viejo
Address: 22863 Via Cereza, Unit 3B, Mission Viejo, CA
Bedrooms: 3
Bathrooms: 1.75
Size: 1,173 sq. ft.
Here is a potentially good condo investment. It won't turn heads from an aesthetics standpoint but it appears to be able to fulfill its basic duty as a rental property. The unit does not appear to require too much work before renting out to a tenant. Mission Viejo is located in south Orange County and has highly rated public schools and low crime. There is plenty of open space and parks scattered around the city, making this a family-friendly option for both renters and owners.
Bedrooms: 3
Bathrooms: 1.75
Size: 1,173 sq. ft.
Here is a potentially good condo investment. It won't turn heads from an aesthetics standpoint but it appears to be able to fulfill its basic duty as a rental property. The unit does not appear to require too much work before renting out to a tenant. Mission Viejo is located in south Orange County and has highly rated public schools and low crime. There is plenty of open space and parks scattered around the city, making this a family-friendly option for both renters and owners.
Listing price: $175,000
Down payment (20%): $35,000
Expected monthly rental income (based on Zillow.com rent estimate): $1,820
Monthly mortgage (30 year fixed @ 3.875%): $658
Monthly maintenance and repair budget: $100
Monthly vacancy budget: $100
Monthly HOA dues: $340
Monthly property tax: $153.13
----
Monthly profit: $468.88
Annual return on down payment investment: 16%
Note that the annual return on the down payment investment does not account for any gain in equity. Adding up the equity makes this an even more attractive purchase from a financial standpoint. Most investors would be happy to find a stock portfolio that can yield 16% annually.
Tuesday, April 24, 2012
Why analyze such a small section of California?
It's simple. Knowledge is local. There are some great real estate reads out there in the blogosphere that talk about the housing market as a nationwide phenomenon. While individual locales are not immune to national headlines, they exhibit unique characteristics that distinguish them from other markets.
The Greater Los Angeles Area (namely, LA and Orange County) experienced feverish real estate appreciation during the first half of the 2000s, just as the nation as a whole. However, the ripple effect of the subsequent crash was not felt equally at all corners of the country. California has countless factors that may have influenced his own housing tumble as well as countless other factors inherent in the state that may affect a recovery. Two examples of this are Proposition 13 and the fact that California is a non-judicial foreclosure state, depending on the type of home loan.
I will focus on condos and townhomes because my own research and observations lead me to the conclusion that they represent a better overall deal than single family residences in the current market. Further analysis to bolster this claim will follow.
Q&A
Q: Is housing a bad investment?
A: Yes and no.
Q: How does this blog differ from other housing related blogs out there?
A: The scope of this blog is quite narrow. It will explain various investment scenarios pertaining to condominiums and townhomes in Southern California. More specifically, condos and townhomes in Los Angeles and Orange counties. Note that the content on this site does not constitute professional financial/investment advice. The content will lay out a combination of facts and observations for the reader to discern and draw conclusions from.
Q: Has the housing market finally bottomed out?
A: Various data reports from various sources indicate that some locales might have bottomed. But as always, nothing is ever certain and data never paints a complete picture.
Q: Why condos and townhomes and not single family residences?
A: Condos are townhomes share more similarities with apartment rentals than single family homes do. The readily available apartment rental ads for various apartment unit sizes give us some benchmarks to work with. Also, condo and townhome units are always part of home owners associations (some single family homes are too), simplifying the recurring cost analysis. There are many other reasons that will follow in subsequent posts.
Q: Why Los Angeles and Orange counties?
A: Personal experience though personal residence.
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