I am looking for a condo/townhouse without association dues; approx., 1000 to 1200 sq. feet, in a quite, safe neighborhood where the resale value will appreciate; not necessarily at a rate of 12% to 16%, however, that would be appreciated. Te desired amount would be 6% to 8% prehaps over a longer period of time.

Any possibilities?

Thanks,

Eloise

Hi Eloise,

Thanks for your comment and your voicemail. My teammate, Vicki, will be calling you on the number you left us, but I wanted to reply here as well.

As you can see above, we’ve experienced really good appreciation on the condos. The numbers for single family homes especially more expensive ones is more like about 12% in some areas.

I think you’re right to try to pick a quiet and safe neighborhood, not necessarily for appreciation, but because your rents will be somewhat higher in such an area and you may attract a better tenant. That said, in this market we’ve seen good appreciation in lots of different areas. Sometimes the most prestigious actually appreciate less, believe it or not, probably some because the price is already beyond the reach of many. Conversely, the most rapid appreciation I’ve ever seen is in one of our worst neighborhoods, as investors took advantage of low prices in 2004 and 2005 and bid the units up.

Vicki will help you as she works with you by phone and in person to focus on some other fundamentals like cash flow. Another advantage to rental property is the depreciation allowance that you can claim on your taxes.

Frank Gallinelli has a good book that helps you crunch all the numbers:

Regarding Condos/Townhouses without association dues, we don’t often find such a thing in Sacramento. (In the case of condos, especially, the name virtually implies association dues because of the definition of a condo, i.e., a set of units where there’s joint ownership of common areas and land — and that needs to be maintained). What might suit your needs however that we do have in this area are halfplexes, i.e., one half of a duplex that has can be sold separately from the other half. (I think they may be called “Duets” where you’re from, I’ll have to check that).

I’ve heard a statistic for El Dorado County (just outside of Sacramento), that, historically since World War II, for any five year period, homes appreciated in value. Having said that, if I told you that homes were going to appreciate xxx percent for any given area for any period of time, I’d be lying to you. Prices fluctuate. You can minimize risk most effectively by having positive cash flow (which you can always get with a high enough down payment), and being able to hold for the long term, which it sounds like you’re planning to do.

Thanks again for your comment!

Hi John!
I am looking for a condo near the CSUS. My budget is 200,000. Please let me know what is the average price for a 1bd / 2bd condo with monthly HOA fees not more than $270-250.
What is the average price to rent a place like that per month? How strong is the demand to rent a place like that?
Do you think buying a condo near the CSUS is a good investment comparing to other places in Sacramento. What should I expect from the today’s market for the condos near CSUS? Do you think the prices will remain the same for the year or two? What about in 5 years?
Thank you very much, can’t wait to hear from you and see what we can do.

Hi David,

I dropped you an email regarding this. Thanks for your interest!

John

I’m in the market for a condo in the downtown/midtown area, probably up to $400K, one bedroom. I should be able to qualify for more, but my goal is to live below my means so I can have some money in the bank and not dedicate my life to making mortgage payments.

I inquired about The Towers and The Aura and since the prices seem to be “bid up”, and the builder wants 10% down to hold the unit for at least 2 years, and the HOA dues are outrageous, I’m inclined to pass on those. The “L Street Lofts” appear to be of the same ilk. Right?

Does it appear that with the enthusasm over the fancy new condo complexes that interest is depressed in the older units (such as 500 N Street) and perhaps there could be some bargains there? Are prices starting to pull-back, or expected to do so?

I’d be looking to move around early to mid-2007 at the earliest.

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