Investing in Condos – Downtown San Diego

One bedroom condos vs. Two bed room condos…

…That’s a higher funding and why? Downtown San Diego has one of the maximum positive real estate markets inside the state right now in line with Cash Schiller. We were seeing increasingly more traders looking to purchase condos Downtown San Diego. The questions we often hear approximately investing in residences in downtown San Diego encompass: new condo for sale

Which is a higher investment, a one bed room or two bedroom condominium?
What will my go back on funding be?
How can I be sure that the market will go up and I may be capable of promote three-7 years out for a earnings?
I will touch especially on those 3 questions despite the fact that there honestly are extra than those 3 principles that pass into choosing a incredible investment belongings. First of all, make sure you figure with someone that specializes within the vicinity you want to buy. For the purpose of this newsletter, allow’s start with question #three – Which is the satisfactory funding, a 1 bedroom or 2 bed room condominium?

In a preceding condo investment weblog, we proved that condos with extra amenities and lower monthly HOA dues tend to pencil out the pleasant for investment purposes. Given those findings, I am going to use examples with those traits.

Are 1 bed room condos or 2 bedroom condos better investments?

One Bedroom Condo Investments

One Bedroom Condos………………………………………….La Vita 404……………………Treo 1305

Purchase Price…………………………………………………. $ 243,000……………………..$ 220,000

25% down price…………………………………………….. $ 60,750………………………$ fifty five,000

Mortgage Amount………………………………………………$ 182,250……………………..$ 165,000

Est. Loan at 5%………………………………………………..$ 978…………………………..$ 886

Property taxes………………………………………………………..$ 229…………………………..$ 207

Home Owner Association…………………………………………..$ 402……………………………$ 389

Total Monthly Obligation……………………………………………$ 1,609………………………..$ 1,482

Rent on equal condos…………………………………………..$ 1,750…………………………$ 1,750

Gross Monthly Profit…………………………………………………$ 141……………………………$ 268

assets control 6%…………………………………………$ 105……………………………$ one zero five

Net Monthly Profit…………………………………………………….$ 36…………………………….$ 163

Annual Return on Investment……………………………………..Zero.Seventy one%…………………………..Three.55%

Two Bedroom Condo Investments

Two Bedroom Condos…………………………………………. La Vita 1708……………………Treo 807

Purchase Price……………………………………………………..$ 420,000…………………….$ 375,000

25% down fee……………………………………………….$ one zero five,000…………………… $ 93,750

Mortgage Amount…………………………………………………..$ 315,000…………………….$ 281,250

Est. Mortgage at five%……………………………………………………$ 1,691……………………….$ 1,510

Property taxes…………………………………………………………..$ 396………………………….$ 353

Home Owner Association……………………………………………..$ 452…………………………..$ 443

Total Monthly Obligation………………………………………………$ 2,538………………………..$ 2,306

Rent on same condos…………………………………………..$ 2,600………………………..$ 2,500

Gross Monthly Profit……………………………………………………$ sixty two……………………………$ 194

belongings management 6%……………………………………………$ 156………………………….$ one hundred fifty

Net Monthly Profit………………………………………………………$ (94)………………………… $ 44

Annual Return on Investment………………………………………. -1.07%………………………..Zero.Fifty six%

As you could see in the above charts, one bedroom funding condos definitely pencil out very similarly to the 2 bed room investment condos. The difference where the investor might also make up their income is at the point of exit. It is arguable that 2 bedroom investment condos could have a higher resale price than one bedroom investment condos.

With 25% down,investment condos downtown San Diego typically yield an immediate ROI of approximately 1% together with tenant placement belongings management. The equal scenario for a cash investor would yield approximately five-6% for one bedroom funding condos…

Cash Investor

One Bedroom Condos……………………………………………La Vita 404………………………..Treo 1305

Purchase Price………………………………………………………$ 243,000…………………………$ 220,000

a hundred% down payment…………………………………………….. $ 243,000………………………..$ 220,000

Mortgage Amount…………………………………………………. $ -…………………………………$ –

Est. Mortgage at five%……………………………………………… $ -…………………………………$ –

Property taxes………………………………………………………$ 229………………………………$ 207

Home Owner Association………………………………………….$ 402……………………………..$ 389

Total Monthly Obligation…………………………………………..$ 631……………………………..$ 596

Rent on same condos…………………………………………..$ 1,750…………………………..$ 1,750

Gross Monthly Profit………………………………………………..$ 1,119…………………………..$ 1,154

belongings control 6%………………………………………..$ 105……………………………..$ a hundred and five

Net Monthly Profit…………………………………………………..$ 1,014……………………………$ 1,049

Annual Return on Investment…………………………………….5.01%…………………………….Five.Seventy two%

…And about 4.5-5% for two bedroom apartment investments (beneath). Again, the numbers for making an investment in condos downtown San Diego aren’t dramatically distinct for a one or bed room condominium as far as immediate return on funding. This being said, it is probably pleasant to decide how plenty money you’re trying to invest and locate the fine belongings in that particular price variety. This is wherein we can virtually assist you’re making a high-quality purchase for an funding property in Downtown San Diego.

Cash Investor

Two Bedroom Condos……………………………………………..La Vita 1708……………………….Treo 807

Purchase Price………………………………………………………….$ 420,000……………………….$ 375,000

a hundred% down fee………………………………………………… $ 420,000……………………….$ 375,000

Mortgage Amount………………………………………………………$ -………………………………. $ –

Est. Mortgage at five%…………………………………………………. $ -………………………………..$ –

Property taxes………………………………………………………….$ 396……………………………..$ 353

Home Owner Association……………………………………………..$ 452……………………………..$ 443

Total Monthly Obligation………………………………………………$ 847……………………………..$ 796

Rent on identical condos……………………………………………. $ 2,six hundred……………………………$ 2,500

Gross Monthly Profit…………………………………………………..$ 1,753……………………………$ 1,704

property management 6%…………………………………………..$ 156………………………………$ one hundred fifty

Net Monthly Profit……………………………………………………..$ 1,597…………………………….$ 1,554

Annual Return on Investment………………………………………..Four.Fifty six%…………………………….4.Ninety seven%

As we illustrated within the charts, the instant ROI goes to be low yielding for investors requiring financing and mild for coins traders, but 5% is higher than anything you will find in a CD or Money Market Account so it’s an awesome choice for people with cash. The real go back could be made on the time of sale which leads us to question quantity 3.

How Can I make sure Downtown San Diego Property Values will pass up?

Of path there are no guarantees with any funding in lifestyles, however as long as the arena remains especially solid and there aren’t any major occurrences that ship the sector economic system sideways, then we (plus Bloomberg and the Case Schiller Index) absolutely, sincerely expect that San Diego real estate is a high-quality area to park your cash. First of all, simple financial standards are involved…Deliver & demand paint an thrilling picture for Downtown San Diego Real Estate.

Today, there are absolutely best 281 houses for sale on the San Diego MLS. There are approximately every other one hundred fifty new condos for sale across downtown for a complete of 431 properties on the market. We are selling ninety three.Three condos per month over the last 12 months so we are looking at approximately a four.Five month deliver of condos without a new developments coming for 3 years great case situation. If rental income stay strong, and they have for the beyond 3 years…

2008 – 1108 condos sold
2009 – 1164 condos sold
2010 – 1120 condos sold
…Then we’re going to have a severe shortage of downtown condos come 2012-2013. With the call for staying consistent, this will power prices up. New builders may not begin to build once more till fees for excessive-rise condos can maintain no less than $500 in keeping with rectangular foot as this is the absolute lowest cost to construct a new concrete, steel and glass apartment constructing.

With the above one bedrooms selling at $354 and $324 in line with rectangular foot and the 2 bedrooms selling at $371 and $299 according to rectangular foot, income costs have a huge gap to span earlier than builders will start taking the threat of building new condos.

This essentially guarantees that values will hit $500 according to squareft again due to the fact let’s face it…San Diego’s climate and awesome way of life are going to attract extra human beings that just get tired of dealing with excessive weather conditions. If you’re taking the highest fee consistent with square foot above at $371 and count on you may get a $500 destiny cost out of it, then you depart yourself a worst case benefit of 26% over x quantity of years. If you’re a cash purchaser figuring out 5% annual ROI, then despite a five yr preserve, you will nevertheless have made 10% for your investment yearly over the five year length.

Chad Dannecker is the founding father of Welcome to San Diego Real Estate, a firm that specializes in Real Estate in Downtown San Diego –

If you’ve got interest in shopping an funding property in Downtown San Diego, then take a look at out our weblog or send us a message and ask us to ship you some facts concerning investments.

Chad and his crew provide immediately answers and could help you locate the proper investment property. Chad lives and works in downtown San Diego and remains accountable to his customers.