San Diego Single Family Home Market
January 29, 2021
A 1031 Exchange on a Condo for a House in Temecula
Prices have skyrocketed and we browse the MLS, we see home after home in the pending column. Prices are soaring, and some San Diego residents are being priced out of the market. Even the mountain community of Julian, east of San Diego, where a couple of years ago homes sold at a “snail pace” is booming. Investors who love the San Diego life style and economic climate are asking where do we buy?
Russell Kochis, the Director of Property Management for LRS Realty & Management, Inc has some thoughts on this subject.
When I think of the areas around San Diego to purchase a single family home to live in or as an investment property I think you can find the best values in Temecula, in southern Riverside County. I will share a story with you. One of my clients did a 1031 exchange
on a condo. Joy, had a condo that she lived in then rented for years. The property was cash flow positive approximately $400 per month but she had a $500/month HOA payment. When her tenant had given notice last February 2020, she asked me if I could find her a single family home in San Diego like San Marcos without an HOA payment that she could 1031 exchange. We determined her sale price of her condo would be about $430k.
There were some smaller homes in Vista that were within her range, but they were older and would need a lot of work to make the situation work. Joy didn't want anything to do with a fixer upper project. I told her she should look in Temecula. We learned the different zip codes of Temecula and the areas that were getting the highest rents. We ended up selling her condo and getting an 1835 sqft single family home 3 bed/ 2.5 built in 2001 with a $105/month HOA. It rents for $2400/mo. The amount of interest for that rental was in my top 2 for demand of all the rentals I did in 2020. Mind you, this happened in July 2020 during the pandemic and still demand was through the roof.
I had more applications than I knew what to do with.
The other lesson we learned is a low-cost HOA is preferable to no HOA. Without an HOA you can end up with homes painted pink and purple as your neighbors or the dreaded car-on-blocks in the front yard next door.
All in all, Temecula has newer single family homes in southern California within driving distance to San Diego, Orange County
and Riverside. We all know single family homes appreciate the most. If you can get a newer home with low maintenance, a low HOA payment, incredible rental demand, positive cashflow, and excellent appreciation, what more can you ask for?
If you are looking in the San Diego market for a single family or multi-family home to buy or lease give Russell a call at 619 867 1713.
Share this post
We live in a fast moving and changing world. LRS has been in the property management, and sales business since 1988. What was once, is no longer, and what is today will soon change by tomorrow. Between the pandemic and our changing values with regard to many cultural issues we seek to find our balance. As society changes, and all businesses try to conform to existing "norms" property managers and real estate agents must do as well.
Over the past 4 decades the property management has changed in so many ways, from rent control, evictions, tenants rights, the definition of quality, and hiring and using vendors. 40 years ago you had "your handyman...
The price of real estate continues to increase, the prices for both single family homes and multifamily have skyrocketed. Rents are at an all time high, as we slowly recover from the Pandemic. Prices for real estate have increased throughout the United States and the world.
