Welcome to San Diego Blog | April 23, 2011

Renaissance 2 Bed Condo

Renaissance Condo 2 bed

I have the conversation with clients every day about which condos are “good deals” in Downtown San Diego.  The majority of the “good deal hunters” are looking for a 2 bed, 2 bath condo, preferably with 2 parking with low monthly home owners dues and $400,000 plus or minus $100k is the most common price range.  For most of these folks, what constitutes a good deal is a condo they can buy today to rent out and net a fair return on their investment.

The overall scenario looks somthing like – I want to park 25% down payment into this Downtown San Diego condo and have the rent cover the mortgage so at a later date, I can sell for a profit or use the property as a vacation home once I have retired.  Or, I want to pay cash and see an immediate return on investment and know that when I sell later, I will increase the modest annual return on investment I see now.   Let’s look at cash versus financing with this great 2 bed condo at Renaissance in the Marina District offereded at $399,000. 

Financing with 25 % down

Two Bedroom Condos Renaissance 605 
Purchase Price  $          390,000
25% down payment  $             97,500
Mortgage Amount  $           292,500
Est. mortgage at 5%  $                1,570
Property taxes  $                  367
Home Owner Association  $                  833
Total Monthly Obligation  $                2,770
Rent on identical condos  $               2,800
Gross Monthly Profit  $                    30
Annual Return on Investment 0.36%

Cash buyer for Renaissance 2 bed condo

Two Bedroom Condos Renaissance 605 
Purchase Price  $          390,000
25% down payment  $          390,000
Mortgage Amount  $                     –  
Est. mortgage at 5%  $                     –  
Property taxes  $                  367
Home Owner Association  $                  833
Total Monthly Obligation  $                1,200
Rent on identical condos  $               2,800
Gross Monthly Profit  $                1,600
Annual Return on Investment 4.92%

I’m using this particular Renaissance Condo because there is great value in the location of Renaissance and the building has recently settled a litigation suit and construction is underway on the common areas.  The location is key because it is literally within close walking distance to everything and is located directly across the street from Ralph’s grocery store, Nordstrom’s at Horton Plaza, and has 2 coffee shops – It’s a Grind and Lion’s Coffee right out the First street exit.   Renaissance is only 3 blocks from the San Diego Bay, Gaslamp Quarter and Pantoja Park.  Petco Park is just far enough away that you don’t experience game day traffic, but it is just a 7 blocks away.

Renaissance condo 605 is approximately 1300 sq/ft with 2 master bedrooms, both with bathroom en suite and large walk in closet.  There is a half bath for guests at the entry and the Renaissance condo is a corner unit that faces both North and West.  The wester exposure offers pleny of sunlight and a cool ocean breeze.  This 2 bed condo at Renaissance also features a large kitchen and plenty of living & dining space plus it includes stackable washer & dryer.

This particular floorplan works wonderfuly for a rental property or a vacation home as the 2 master bedrooms are separated by the living space so privacy is not an issue.  This works well for roomates or for families with young children or adult age children.  Renaissance 605 includes 2 parking spaces which is a plus for both investment properties and vacation homes.  Rents on similar properties in Renaissance range from $2650-$3450, but in this case we are assuming a $2800 rent which would be attainable in the spring and summer months (could be more).

As you can see in the charts above, the “deal hunter” with 25% down nets less than 1% on their investment and it is similar to a savings account (not including deductions or depreciation for tax purposes).  The cash buyer nets almost 5% which is a modest return on an investment.  The real question is…Do you believe San Diego Real Estate will be going up in prices in the next 3-7 years?

I do and I am parking my cash in Downtown San Diego real estate…I just bought a condo a few months back and wouldn’t have done anything different if I had it to do over again.  If making 5% annual return on investment with the opportunity for upside when exiting the market that could potentialychange that 5%  into 10% or better, then give us a call and we’ll get started on finding a great investment property or vacation home for you.  619-309-8011


Written by: chad

Categories: Buyers, Downtown San Diego, Marina District, Marina District Real Estate, Real Estate Investment, San Diego Real Estate

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