June 4, 2008

Great investment property idea in Daly City

50 Theta Ave, Daly City 94014
$499,000

* Status: Active
* Bedroom: 2
* Bathroom: 2
* Year Built: N/A
* Lot Size: 4900
* Square Footage: N/A
* List Date: 7/21/2007
* Garage Spaces: 0
* MLS#: 740690
*
very close to public tranportation,freeway 280,shopping center,bart 2 bedrooms 1 full bath and kitchen. now rental $1700.00 month to month.seller will carry 2nd

So right now this rents out for $1700 a month. Now, you could rent it, or you could buy it for $499. $499000/(1700*12) is only 24! That’s a pretty good ratio don’t you think?

Not only that, but the seller will carry the mysterious 2nd.

Frankly, this is a fantastic investment opportunity if you ask me. It’s all about cashflow, and cash will be flowing for sure. Wouldn’t you agree?

Comments (12) -- Posted by: burbed @ 5:08 am

12 Responses to “Great investment property idea in Daly City”

  1. bob Says:

    I love it when people use interior hollow core doors for main exterior entrances.

  2. Steveo Says:

    Burbed -

    We’re not even in the top 10:
    http://finance.yahoo.com/real-estate/article/105172/The-Most-Expensive-Real-Estate-Markets-in-the-World

    $6K/sq. ft. Sheesh, PA has a long way to go at only $1K…

  3. Gavin Says:

    Why would you buy a 500K property renting for $1700 per month in Daly City when you could get two and a half 200K properties in Elk Grove (south of Sacramento) renting for $1200 per month each?

    Your investment for the houses in Elk Grove would be the same 500K but your monthly rent would be $3000 total. The price to annual rent ratio would be 14 in Elk Grove which is a much better deal than for this Daly City house.

    By the way, the price to annual rent ratio in Elk Grove in early 2006 was similar to this Daly City property. What a difference two years makes!

  4. madhaus aka guitar hero Says:

    This price/rent ratio is simply the yearly version of GRM (Gross Rent Multiplier). Just pick a few properties and see what the GRM for the Bay Area is, in Irvine the number used is often 160 (monthly not yearly GRM!). But PR ratios of 25 imply monthly GRMs of 300. Ouch!

    GRMs are used for investment property such as apartment buildings. For multiunit buildings, GRM would be lower than a house.

    Rental prices and housing prices often seem disconnected. I’d expect those high rents in Elk Grove to lag for a few years, but not forever.

  5. microtherion Says:

    Well, in Daly City, exercising your 2nd amendment rights by carrying might indeed be advisable.

  6. cardinal2007 Says:

    The problem is you’re not well connected enough, the house costs 500k, and taxes are 1.25% of that. Rent is 4.08% so we just need to borrow money at 2.75% in order to get this into positive cash flow. Ignoring maintenance, vacancies, insurance, earthquakes, trouble tenants. You can be a very good slum lord. Or you can try fixing it up, doubling the rent to $3,400, and then having no one live there really since it is Daly City. I suppose the actual thing to do is convert the storage underneath to a separate unit, and hope for the best?

  7. Gavin Says:

    “madhaus aka guitar hero”, are you saying a rent of $1,200 per month for a 3 bed, 2 bath Elk Grove house is too high?

    Even if this rent remains constant for a few years before rising with inflation the Elk Grove house is a much better deal than the Daly City property.

    The only hope for a good return on the Daly City property is for Web 2.0 (or Web 3.0) to cause a new internet boom driving rents up 50% within a couple of years from today’s rent.

  8. madhaus aka guitar hero Says:

    Gavin, I am saying that Elk Grove prices are crashing so the GRM is down. Eventually the rents will follow the sales prices. Remember, the ratio was higher when sales prices were WTF crazy and rents were similar to now.

  9. rick Says:

    Comparing Elf Grove and Daly City?

    How far is Elf Grove to Google? A million miles? How about the ocean? San Francisco? SFO (where rich Asian and Europeans arriving daily)? And Burlingame/Palo Alto/…/etc?

    Will those people priced out of Lands-End at Mountain View move to Elf Grove or Daly City? Obviously Daly City. In a few years the town of Daly City, where previously the front desk clerk at doctor’s office lives, will be join by the doctor himself.

  10. passthebubbly Says:

    Why does it say “Original” Daly City? Have people been settling for some sort of substitute Daly City, perhaps becuase they’ve been priced out of Daly City forever? Is some ersatz Daly City parading aroung fooling people? Help me here, I don’t live in the Bay Area so don’t know these things.

  11. madhaus Says:

    Didn’t notice the ‘Original’ Daly City tag. Good catch, passthebubbly. Wondering what the rest of Daly City is called?

    – Classic Daly City?
    – Daly City II
    – Daly City, Part 2
    – New Daly City
    – Improved Daly City
    – Daly City 2.0
    – New & Improved Daly City
    – Daly City: The Sequel
    – The Rest of Daly City
    – Unoriginal Daly City
    – Faux Ville de M. Daly
    – Daly City Knockoff
    – DC Too
    – Daly City Carbon
    – Daly City with Almonds
    – Twice Daly City
    – DC CC
    – Lady City
    – Plagiarized Daly City

  12. DensityDuck Says:

    Daly City 2: Dal Harder
    Daly City 2: The Dalyening


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