Hi again Jai, your idea sounds really exciting. Unfortunately it is in an area that I have little or no experience of, by that I mean the West Coast and also holiday lets. My own particular strategy has been firstly to find areas of low entry cost to the market. Secondly the area has to be well established into a rental culture with a good supply of blue collar workers or the Section 8 culture is well established (local version of DSS). The third issue is that I look at properties that will be attractive to the local population to rent and maybe ultimately buy (keep in mind what your exit strategy is). Finally for me the issue of cash flow/revenue is greater than capital growth (at least for just now).
To purchase for holiday lets is a different market and unfortunately my experience of such is limited to Spain where my parents had a place. They bought well in the 60s before Spain got crazy and for many years they rented it out through the year to every kind of nationality. They used a London based marketing co and a locally based property manager. The big blow however came when the local property manager 'did a runner' with all the previous years rents. And I regret to say this is a story I have heard from several; sources in the States. It would appear any old Joe can set up stall as a property manager, be there one day and gone the next. Please take your time to choose a good team. Test them out in any way you can as the good ones will respond, the bad ones you will never hear from again. As for Realtors, please find someone who is specialised in the field you want to enter. They say you make your money when you buy and that is the Realtors job. Might I suggest you try and make contact with one of the local Real Estate Investment Clubs in Santa Barbara. They can help with so many things and most especially with advice. Try this out:
http://www.nreiclub.com/scal/
Seeing your background, finance might not be an issue but the concept of short rentals versus traditional leases may or may not be an issue. State laws also require the property to be outfitted in different ways ie local property codes, so if you are buying off plan then I suspect you might need to let them know it is for a holiday rental. This is only my feeling - not gospel.
One thing you might keep in mind is what is going on with climate
change at the moment and all the fires they have had in CA. In addition
to the fire risk there is also significant drought risk. You may find
you can't fill the pool or water the garden or in the most serious of
cases, they cut off the water supply at certain times of the day. From
my reserach the worst affected areas in CA are:
Los Angeles-Long Beach-Santa Ana, CA; San Diego-Carlsbad-San Marcos,
CA; Oxnard-Thousand Oaks-Ventura, CA; Riverside-San Bernardino-Ontario,
CA
Your
holiday makers will want all mod cons and I supect water is one of
them. I'm not saying your area is bad but check it out on
DroughtScore.com
The West coast generally has much higher entry costs than I am looking at and I am not sure what kind of rentals you are hoping to receive. It may or may not be possible to achieve high yields but I guess that the potential for capital growth over the longish term ie 5 years plus is much better than what I am looking at. It all boils down to what your stategy is.
I wish you well Jairaj and would welcome your experience of buying on the West coast. It would seem that in the USA there are so many more ways to make money out of property in the USA than is the accepted norm in UK. In the meantime, when I have a property that I think might interest you I'll get in get in touch (hopefully early new year).
Regards
Robin