I have a listing for a triplex in Larkspur, priced at $1,175,000. I think it’s a great listing for lots of reasons, not the least of which it is just steps from downtown Larkspur.
A recent change at the property makes it highly desirable from a buyer perspective now. The best and biggest unit, a three bedroom, two bath, 1400 square foot apartment with a big deck overlooking Magnolia Avenue, has just vacated. The owner had it leased through July, but the tenant suddenly left, and the owner decided it was a good idea.
Why? Larkspur continues to be one of the strongest real estate markets in Marin County. This is a community where buying a house is incredibly difficult, and almost never available for less than $800,000. In fact, right now, the cheapest house still available is $999,000, and it’s a contractor’s special with a capital S. Now, buyers have the chance to own property near town, live in it, and have income to pay for the mortgage.
How much on the mortgage? The two units downstairs generate $2700 a month in rent right now, and probably have some upside. At the great interest rates available right now, that easily covers $400,000 a month in mortgage payments, and leaves $250 or so a month to help with property taxes.
That’s money you can basically subtract from the sale price. So now we’re down to $775,000, for 1400 square feet, 3/2, recently remodeled, with a front and back porch. Still sound expensive? If you're not from around here, I'm sure it does. Heck, I sell this everyday and it sounds awful expensive to me!
But take a look at condominiums in the area, such as the ones along South Eliseo in Greenbrae. For about the same price, you get about the same square footage…factor in homeowners dues on a condo (often $300 + a month in this area), and for the same money, you actually own a piece of land, and don’t have to worry about what the homeowner’s association decides to do about the leaking roof.
Which would you rather do? Own a condo for $650-$700,000, or own a larger piece of property, and enjoy the benefits of greater leverage over time?
What do you think?
Next, Part II.
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