Putting the real in Real Estate

T. and I own a rental property up in Hemet that recently came back on the market. Hemet is an interesting part of the real estate market in Southern California because it's part of what we used to think of as a desert but for commercial reasons it gradually came to be known as "The Inland Empire"

The Hemet-San Jacinto Valley is a medium sized community with a little over 100,000 residents in the entire valley. Most are either retired or commute. We are tucked in the far corner of the area known as the Inland Empire. From the closest points, we are 10 miles from the 215 Freeway to the West and 10 Miles to
the 10 Freeway to the North. Since the valley extends about 10 or 12 miles, many of us are 20 plus miles to a freeway. To the south, beyond a large reservoir known as Diamond Valley Lake is the French Valley, which is unincorporated area of nothing but new homes for about 5 or 6 miles before you reach the border of Temecula & Murrieta. These are much larger, newer and more expensive communities than Hemet. Therefore, our housing is much more affordable. Where our average price home is still around $350,000 the homes in Temecula and
Murrieta hover around $500,000. Further south is San Diego County, where million dollar homes are more an more common San Diego buyers who can't afford that market are shuffled off to Temecula and then the Temecula shoppers who can't afford that market are shuffled off to Hemet.

I picked this up from a local realtor/blogger that I didn't even know existed before I started this post. Yesterday, as we were riding around Hemet, visiting Lowe's, eating lunch, and looking at our property, I realized that something had definitely changed in the three years since we bought. There are now more than twice the amount of homes and apartments for rent. Each housing community, there are pockets of them all over the valley, is now studded with for sale signs. At least, 25% of which are of bank-owned properties, and the remaining 75% have been reduced since first offered.

In the little 55+ community we bought into, there are at least 50 of the 1,000 units that are for sale and another 50 that are for rent. When we bought in, T. wanted two things, cash flow and a chance to help others in a low rent area. We bought low, $1o4K, and put down $30K and kept the mortgage low by doing a 3/1 arm at 4.25%. But now, as we just finished a refi to a 6% 30 yr., the property has gone for rent for the second time since we took possession. And so, now we get to decide, spend $4K to increase its curb appeal or sell and put our money elsewhere?