Pleasanton Investment Properties

Clients are asking me about Pleasanton investment properties, especialy with the proliferation of bank owned properties (REO’s) and “short sales”, there has been a lot of interest among buyers to purchase these properties and hold them as investments. Namely, rent them out to others.

Great idea!! Renting to others is a fine way of building wealth, since the renter pays quite a bit, and depending on how much money you put as downpayment, it could be all your monthly expenses (mortgage, insurance, taxes, etc). Sure, there are the occasional headaches of dealing with tenants and maintenance issues, but these can be mitigated with good planning and procedures.

I have purchased and managed investment rental properties for myself and for clients for over 12 years and I know first hand what great wealth generators they are.

Over the last year or so, many clients have been asking about purchasing REO’s or “short sale” properties. Since I live in Pleasanton, many are asking about purchasing single family homes that are REO’s or “short sales” in Pleasanton, for investment purposes.

But, just because a home is an REO or a “short sale”, that alone does not an investment property make!!

I personally prefer multiple units. Why? Consider these 3 facts:

1) If you have a single unit (1 house, or 1 condo etc) and your tenant moves out, you have 100% vacancy! Hopefully you have enough reserves to pay the mortgage till you find the next tenant. If you have say a 4-plex, and one tenant moves out, you have 25% vacancy, and the other 3 tenants pay for the mortgage.

2) Single family homes in Pleasanton start at about $500,000. At $2,200 per month in rent (for the average 1,300 square foot home), your yearly “gross income” would be: $26,400

I recently sold a 4-plex in San Jose to an investor for $670,000. The property is located at 563 Troy, near Saratoga Avenue and Stevens Creek. The property generates $4,276 per month, or $51,312 of “gross income” per year. Much, much better return!!!! Yes, you can buy a home in Pleasanton for $670,000, but you cannot rent it for $4,200!!!

3) Your per “unit cost”, in Pleasanton would be: $500K for the single family home. With the above 4-plex as an example it would be: $670,000 / 4 = $167,500. Much, much better!!!

Yes, you can buy a condo in Pleasanton for $170,000 (actually there is one for sale on Arroyo Dr for that much), but you have to spent $237 per month on HOA fees alone. There goes your profits!!!

So, I will definately buy a home in Pleasanton to live in it!!! It is a wonderful community, but don’t be fooled into thinking that because a house is bank owned or “short sale” in Pleasanton, it is an “investment”.

I have more insightful facts about investment properties, and if you are thinking of purchasing one, I can help with selection, running the numbers, valuation, buying, selling and managing.

By the way, the 4-plex at 563 Troy, sold on December 17, 2009 for $670,000.

Directions to our office