Are you thinking of investing in real estate in San Diego? You might be thinking of hopping on the “house flipping” bandwagon, or just holding onto a property and watching the market trends. You could be in it for the long term, planning on a quick fix and a quick sale, thinking about buying raw land, or contemplating a rental property. Real estate investing is exciting and fun, but not for the faint of heart. The most important thing is to know the market, and San Diego is a quantity unto itself.
First off, in San Diego, land values are extremely high. You’ve heard the expression, “Buy land; they’re not making any more of it.” You won’t get cheap land. Often, land in San Diego is worth far more than any buildings might be present. So if you’re thinking of buying a fixer-upper and turning it, you might just be wasting your money on renovations and repairs. Just fixing up a building won’t really increase the value of the property, since a potential buyer may very well just be interested in the land.
If you’re looking at owning your own home, you might be thinking of buying a multi-unit dwelling and renting out part of it to offset your mortgage, and then converting it to a single-family dwelling. Again, this isn’t without its pitfalls. You could end up renovating an undesirable property that you’ll have trouble unloading if you plan on this as your “starter” home. In San Diego, many multiple units are in undesirable areas, like near a freeway. So you buy the property, live in half or a third of it, and then once the mortgage is paid off, you renovate. Sooner or later, you want to move to a more desirable area, but you find that no one wants a single-family dwelling near an airport, freeway, or rail line. You lose.
If you can afford to invest in something a little more upscale, like a property near a national park or close to the ocean, the good news is that property values continue to rise in the San Diego area. Your best real estate investment is something you can hold onto – in the long term, you’ll make money.
By all means, invest in San Diego real estate. But don’t waste your money on fixer-uppers. Go for the best property you can afford, and wait to sell.