How much of a premium for location?

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25w100k+_IHB

25w100k+_IHB

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As a lot of you know, I'm in the market for a 2/2 condo with the intention of living in it for a while, then renting it out. I'm realizing more and more that convenience is pretty important to me, so I'm looking at Irvine and Aliso mostly.



My question to the rest of you knowledgable RE Gurus is how much of a premium I should place on certain locations vs others, and how much it will affect resale value. *I* personally would rather pay a few hundred more a month to live closer to the 405, or have a slightly smaller place, but i'm not sure if that translates to resale value or increased rent.



Obviously, I think Turtle Ridge has further to fall then say, The Groves, but what about Woodbury/Quail Hill vs. West Irvine or Northpark?



I'm not looking to flip it, so if I miss 'the bottom' by 5% or so, oh well, but I also don't want to throw money away. Do the wise ones here think that Quail Hill will keep its premium over northpark, for instance, and will rents remain higher there?



Thanks in advance to the thoughtful replies!
 
Have you ever tried to make an "acceptance criteria matrix". Then populate it with numbers/scores to "impartially" reflect your requirments?

give it a shot and see what happens.



Otherwise I do think QH is premium over NP. But for me, the remote location as well as getting into and out of that locus is FAR too big of a price to pay. I like to be close to wherever i'm working... (but we will see). As some wise guru said.. "location, location, location"! :lol:



Being "closer" to the sea is probably the reason.



-bix
 
[quote author="25w100k+" date=1216966261]As a lot of you know, I'm in the market for a 2/2 condo with the intention of living in it for a while, then renting it out. I'm realizing more and more that convenience is pretty important to me, so I'm looking at Irvine and Aliso mostly.



My question to the rest of you knowledgable RE Gurus is how much of a premium I should place on certain locations vs others, and how much it will affect resale value. *I* personally would rather pay a few hundred more a month to live closer to the 405, or have a slightly smaller place, but i'm not sure if that translates to resale value or increased rent.



Obviously, I think Turtle Ridge has further to fall then say, The Groves, but what about Woodbury/Quail Hill vs. West Irvine or Northpark?



I'm not looking to flip it, so if I miss 'the bottom' by 5% or so, oh well, but I also don't want to throw money away. Do the wise ones here think that Quail Hill will keep its premium over northpark, for instance, and will rents remain higher there?



Thanks in advance to the thoughtful replies!</blockquote>


Best answer would be from an appraiser. I called one I know and asked what his opinion was based on your general question: it can vary from 5-20% even within the same city. I've PM'd you with his contact info. If you give him a call with specifics, he should be able to help you. If you get a better answer please post it. Thx.
 
[quote author="IrvineRealtor" date=1216968239]

My question to the rest of you knowledgable RE Gurus is how much of a premium I should place on certain locations vs others, and how much it will affect resale value. *I* personally

Best answer would be from an appraiser. I called one I know and asked what his opinion was based on your general question: it can vary from 5-20% even within the same city. I've PM'd you with his contact info. If you give him a call with specifics, he should be able to help you. If you get a better answer please post it. Thx.</blockquote>


Even though I?m extremely partial to Northpark,

I?d like to hear the appraiser?s opinion as well.

Could you post the results of that discussion for the rest of the forum members?

I would greatly appreciate it.
 
[quote author="IrvineRealtor" date=1216968239][quote author="25w100k+" date=1216966261]As a lot of you know, I'm in the market for a 2/2 condo with the intention of living in it for a while, then renting it out. I'm realizing more and more that convenience is pretty important to me, so I'm looking at Irvine and Aliso mostly.



My question to the rest of you knowledgable RE Gurus is how much of a premium I should place on certain locations vs others, and how much it will affect resale value. *I* personally would rather pay a few hundred more a month to live closer to the 405, or have a slightly smaller place, but i'm not sure if that translates to resale value or increased rent.



Obviously, I think Turtle Ridge has further to fall then say, The Groves, but what about Woodbury/Quail Hill vs. West Irvine or Northpark?



I'm not looking to flip it, so if I miss 'the bottom' by 5% or so, oh well, but I also don't want to throw money away. Do the wise ones here think that Quail Hill will keep its premium over northpark, for instance, and will rents remain higher there?



Thanks in advance to the thoughtful replies!</blockquote>


Best answer would be from an appraiser. I called one I know and asked what his opinion was based on your general question: it can vary from 5-20% even within the same city. I've PM'd you with his contact info. If you give him a call with specifics, he should be able to help you. If you get a better answer please post it. Thx.</blockquote>


Appraisers IMO can only compare comps from near-by properties. And resale are closely tied to original purchase price. When a brand new community is unveiled by TIC it started from there because TIC set the price premium based on brand perception related to villages and view. The public has no control over the premium and neither do the appraisers. What the appraiser could analyse are the micro factors such as upgrades, Lot location (such as end lots), privacy, and improvements.
 
I don't know squat about Irvine, but as someone who has carrying costs on a rental I'd like to point out another factor besides resale value and the premium you pay for desirability. Vacancy. When you look at a property from a cash flow perspective, an extra 30-60 days of vacancy can be costly. If it costs you $300 more per month in carrying costs to have a property that will rent quickly vs another that will sit longer, you can see how much of that carrying cost savings is eaten up with a 60 day vacancy. The more desirable your neighborhood, the faster you will be able to find tenants and the greater your pool of quality prospective renters will be.
 
[quote author="IrvineRealtor" date=1216976071]Vacancy is independent. With the right price, vacancy is eliminated.</blockquote>


True, very true. But if you weigh in going below market in a desirable area and doing so in an average demand area, I still think your vacancy time will be lower in a higher demand area and your selection of quality tenants will be higher. Again, I don't know squat about Irvine.
 
I agree with Step. Think about vacancy and who your targeted tenant is. Is it someone like yourself, Ten, IrvineSingleMom, DINKS or something else? Then figure out how many are out there that met those criteria and will have the income to cover your PITI.



Largely, Irvine is familyville, the 2/2s are an interesting dichotomy in it.
 
So you think TIC trumps the market? I would think if no one bought at TIC prices, that premium wouldn't be a premium for very long. That statement doesn't make sense unless you worded it incorrectly.
 
[quote author="looking4house" date=1216983089]did you consider westpark area? Its close to 405 and 5 freeways.</blockquote>


I agree...I think Westpark II is probably the BEST location in Irvine..probably why nobody is really selling or getting foreclosed on (mostly original buyers in the $300k range)
 
[quote author="optimusprime" date=1217035830][quote author="looking4house" date=1216983089]did you consider westpark area? Its close to 405 and 5 freeways.</blockquote>


I agree...I think Westpark II is probably the BEST location in Irvine..probably why nobody is really selling or getting foreclosed on (mostly original buyers in the $300k range)</blockquote>


I concur.....right smack in the middle of the 5 and 405 sounds very nice.
 
[quote author="25w100k+" date=1216966261]As a lot of you know, I'm in the market for a 2/2 condo with the intention of living in it for a while, then renting it out. I'm realizing more and more that convenience is pretty important to me, so I'm looking at Irvine and Aliso mostly.



My question to the rest of you knowledgable RE Gurus is how much of a premium I should place on certain locations vs others, and how much it will affect resale value. *I* personally would rather pay a few hundred more a month to live closer to the 405, or have a slightly smaller place, but i'm not sure if that translates to resale value or increased rent.



Obviously, I think Turtle Ridge has further to fall then say, The Groves, but what about Woodbury/Quail Hill vs. West Irvine or Northpark?



I'm not looking to flip it, so if I miss 'the bottom' by 5% or so, oh well, but I also don't want to throw money away. Do the wise ones here think that Quail Hill will keep its premium over northpark, for instance, and will rents remain higher there?



Thanks in advance to the thoughtful replies!</blockquote>
Check your PM my fellow E46 bro
 
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