Purchased for $700,000 in 2012, or roughly $1,150 per square foot, the one-bedroom One Rincon Hill condo #4404 was listed as a rental for $3,800 in mid-2014 and actually rented for $3,750 per month, which included valet parking along with the unobstructed views.
With monthly HOA dues of $724 (circa 2012) and taxes of $9,331 per year, we’ll call it a rough CAP rate, or return on the asset, of 3.9 percent. Of course that’s not accounting for any vacancy or other operating expenses, such as insurance.
With the lease recently renewed for another year without a bump in the rent, which itself is worth noting, the condo is now back on the market for $935,000 and “ready for investors” at $1,545 per square foot. And with the HOA dues having increased to $786.50, the effective CAP rate at asking would be around 2.5 percent.
The unit had been listed, prior to the lease being renewed, for $949,000 earlier this year.