Buying an Investment Property on the Peninsula

Buying an investment property on the Peninsula right now is a no-brainer for many.  People are are buying real estate for 15-50% less than it would have cost 3-5 years ago and are earning supplemental income from collecting rent. Before you go out and buy another home, you should really have a feel for what you want out of an investment property and what's important to you. There are many things to consider:  how much you would like to invest and the liquidity of that investment; if you would like to have tenants; and how much work you may need to put into the property.

On the peninsula the 3 most common types of real estate that people buy are single family homes, condos, and multi-residential properties (duplex, triplex, etc.).  Here are a few things you should know about each type of property:


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SINGLE FAMILY HOME:

Single family homes typically appreciate and sell fastest out of the 3 property types -- this may be an ideal investment property for someone who wants the functionality of a more liquid investment.  This property type is bought and sold more than condos and multi-residential properties in our area, hence there is a higher demand for single family homes.  Price: $147,000-$25,000,000

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CONDO:

Condos are priced the lowest out of the 3 property types — you could buy in a condo in a sought after area for less than you could buy a single family home or multi-residential property.  Unlike a single family home or multi-residential property (in most cases) you’re not required to pay for maintenance outside of your unit.  However there are HOA dues you must pay monthly that go towards exterior property maintenance and building a reserve.  HOA dues are typically around $300-$400 (will vary by property).  Price: $115,000-$1,500,000

MULTI-RESIDENTIAL PROPERTY:

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Multi-residential properties have the highest rental income out of the 3 property types.  A duplex for $300,000 might yield $2,450 per month in rent, a single family home or condo for $300,000 might only yield $1,500 per month in rent.  Multi-residential property typically requires more work on the investor’s part due to multiple tenancies and more complex plumbing (multiple kitchens, bathrooms, etc.).  Price: $278,000-$4,600,000