FBS Property Management eNewsletter for Independent Rental Owners & Serious R.E. Investors by Neil Fjellestad and Chris DeMarco
We often get asked whether it is viable to purchase an individual condo or detached single home as an investment operating the property as a rental home. Then there are those that are currently in this position as they move from their current residence. Should they rent it out or go ahead and sell even if the sale won’t achieve their goals? Their real estate agent is often recommending a sale and the owners are concerned whether this investment strategy as a rental can work over the long term.
Our four decades of real estate experience gives us a unique perspective which is very direct and transparent. Well located real estate should be owned as a long term investment since it is the safest, most productive method for average people to build wealth. We also believe that property should be kept rented in order to make a long term hold possible since rent collected is helping to keep the property well maintained and paying down loan principal. Eventually the property will be debt free and the rent can become an excellent safe source of additional retirement income for the investor. We have taught and utilized this realistic real estate doctrine for decades while keeping our clients on track with comprehensive advisory services and “best practices” property management.
So keeping our experience in mind and the fact that FBS currently operates rental property in 69 zip codes throughout the SD region we are encouraged by the latest findings coming out of the research department of Zillow. The following was published on August 15, 2014:
Homeowners are faced with two options when choosing to move up the property ladder: sell the old home or rent it out. According to a new report from Zillow, homeowners might want to think twice before selling if they live in these 10 cities
“When deciding if they should sell their home or rent it out, most mom-and-pop landlords are primarily concerned with whether or not they can cover their mortgage payment each month – they simply can’t absorb monthly losses like professional investors,” said Zillow Chief Economist Stan Humphries.
“However, the greatest returns are actually in markets like San Jose and San Francisco where there are short-term monthly losses, but the long-term earned equity makes them the best markets to invest in,” Humphries added.
Nationally, the Zillow Rent Index has increased 2.5% since June 2013 and 9.1% since June 2011.
And on a local level, the Zillow Rent Index has gone up as much as two to three times that amount over the past year in rental hotspots such as metro Chicago (6.3%) and San Francisco (11%).
These are the top ten markets in the country identified as those most likely to incur long-term financial gain (long-term monthly profit is defined as follows: This includes home equity gains, tax benefits and the difference between monthly rental income and mortgage payments after holding onto the property for six years on the median home)
10. Honolulu: $2,512
9. Sacramento, California: $2, 694
8. Seattle: $2,861
7. Boston: $3,009
6. New York: $3,179
5. Riverside, California: $3,659
4. San Diego, California: $4,165
3. Los Angeles: $4,328
2. San Francisco: $6,078
1. San Jose, California: $8,927
Please shop and compare; not just price but services and expertise. We have built a healthy San Diego business out of advising independent real estate investors, acquiring and managing rental properties for clients while providing superior housing alternatives for qualified renters. We’ve accomplished all of this daily for longer than four decades and currently operate rental properties (houses, condos and apartments) in 69 zip codes throughout the region. Our rental vacancies change daily. Take a peek today www.fbs-pm.com/rentals
If you’re a qualified renter you deserve to be treated like the preferred customer you are.
Educate yourself www.RentSenseBlog.com
If you’re a local rental owner now you hold a winning ticket if you want a preferred retirement. A preferred retirement includes a personal residence plus rental properties held without debt and managed by professionals. This financial condition allows you some important lifestyle choices where you live and how you live. The ONLY challenge according to Warren Buffet? Comprehensive and constant professional management of your rental business. The solution in San Diego is complete property advisory and management services by FBS.