Real Estate: California/Help Me Choose


My wife and I will be relocating to the Inland Empire area of California in the next few months. We have found two new construction projects that we really like. One is a 2 bedroom, 2 bath town home with attached garage in an established, desirable area of Temecula. The other is in a new area of Lake Elsinore I would describe as more of a city in transition. The home is a 4 bedroom, 2.5 bath single family home in a brand new master planned community and the amenities in this community are first rate.

My question is: which is the best option to buy now in anticipation of turning this property into a rental in about 5-7 years? There is a chance we might keep the home to start a family in, but as of now, we see this as becoming an investment property in the next 5-7 years. Which would you choose? The town home in the better location or a larger single family home in a nice new area, albeit less desirable on paper? The prices of the homes are similar.

Your feedback is greatly appreciated. Thank you.

Town homes are seldom good investments, unless they are beach front in a highly desirable vacation spot or in a business center like downtown Manhattan. When real estate markets soften, town homes and condos are the first types of property to lose value and the last to recover value when the market rebounds.
But some single family homes are also not good rentals. The best rentals are typically 3 bedroom 2 bath and are located in areas where there are lots of renters. Larger and more upscale single family homes in exclusive neighborhoods are often not good rentals because the average renter can't afford them. Unless renting for a short period due to relocation or a fire rebuild, renters with good credit can usually buy a home for about the same monthly costs as a deluxe rental.
I don't know the rental markets in Lake Elsinore and Temecula, though I've been to both many times.  All I can tell you is that a home that might meet your particular needs might not be a good match for renters, so you should look at whichever home you buy with that in mind.
I hope this helps.  

Real Estate: California

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John Souerbry


I'm a independent real estate broker specializing in luxury homes, land, properties in probate or trust, and real estate investment in Northern California. My geographic focus is Silicon Valley, East Bay, and North Bay/Wine Country.


I have experience in buying/selling residential and commercial real estate, property management, financing, and preparation and sale of properties in probate or trust.

National Association of REALTORS(R); California Association of REALTORS(R); Silicon Valley Association of REALTORS(R); Bay East Association of REALTORS(R)

My web site blog includes current market information and my "Real Estate Jargon" series that explains real estate industry terms.

BS, Business Administration MBA, Global Management

Past/Present Clients
I have worked with individuals holding one or two properties and with clients and estates holding over 40 properties of many different types (apartments, condos, single family homes, land). My latest transaction was a listing of 2.45 acres of land for development in Palo Alto, CA that sold for $15,580,000 (November 2012).

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