Every investor knows that the most expensive investment properties are found in California. You’re not going to be happy if your primary concern is cash flow. However, if you’re comfortable with modest or even negative cash flow in the short term in order to make major gains in the long term, California is where you want to be.
Any investor who measures their initial investment against the potential ROI in these three California markets will see that the numbers and the money make sense. When you’re looking for a place to buy and rent out residential property in California, consider San Jose, Santa Cruz, and Sacramento.
San Jose Rental Property Investments
San Jose is the epicenter of Silicon Valley and the place to be for tech companies and start-up cultures. This has created a community of professionals with high salaries and a desire to rent in order to remain mobile. As the third-largest city in California, San Jose is surging with tenants who want well-maintained homes with modern updates and conveniences. The average listing price in San Jose is just under one million dollars, so you’ll need to be ready to pay for the property you want.
That may seem formidable, but you can calm yourself by looking at the way home values have also increased. Over the last year, values have gone up by more than 17 percent, and they’re expected to increase by about 15 percent this year. When it comes to real estate appreciation, San Jose is in the top 10 percent of markets nationwide. Those are hard numbers to ignore when you’re trying to figure out whether your investment is worth the money. If you’re a long-term investor committed to a buy and hold strategy, take a close look at the San Jose market.
Invest in Santa Cruz Single Family Homes
If you have any real estate experience at all, you know that location, location, location is everything. No one has to explain that to investors in Santa Cruz, with its thriving small-town coastal charm. Who wouldn’t want to live here? Investors can find some really special properties in some well-established Santa Cruz neighborhoods if they are patient and willing to act quickly when the right deal shows up. We see a lot of investors who buy property now, rent it out for 20 years, and then move into it themselves once retirement rolls around. It’s a great strategy.
When we’re talking to investors who are interested in Santa Cruz, we always recommend the standard three-bedroom, two-bathroom single-family home in a neighborhood with an excellent reputation. There are some homes at the lower end of the median price range that will make excellent rentals. With high-quality rental inventory fairly low, you’ll find a great tenant who wants to live in your attractive home. Then, you’ve hit the jackpot because you’re using other peoples’ money to pay your mortgage and expenses while earning impressive long-term returns.
Sacramento Real Estate is an Excellent Investment
Sacramento is California’s capital city and one of its most promising markets for investors. When you want to buy in California but you don’t have a million dollars to spend, consider this city, which was initially slow to recover from the recession but is now thriving economically. More people are moving in every day, and the cost of living is as positive as the quality of life. Tech jobs and companies are also arriving, which provides investors with a large pool of tenants who are well-paid and in possession of high housing standards.
There has been an increase of about two percent in the price of residential housing in the last year or two. The growth rate for home values has kept pace and is helping investors earn more on their properties, especially when they aren’t anxious to sell. You’ll want to take a close look at new construction throughout the city; particularly when it comes to single-family neighborhoods and even multi-family buildings. Don’t wait too long; invest before everyone discovers Sacramento.
Choosing a Property Management Company for your Investment
When you invest in California, you’ll need a San Jose property management company that understands the market and its tenants. You’ll want property managers who know California law and the challenges that landlords face, and you’ll want a professional and experienced management team that can help you earn more and spend less on your investment.
If you’re interested in Santa Cruz property management and investment homes, please contact Portola Property Management, where you’ll receive unparalleled service.
Buyers who are interested in finding investment property in San Jose, please contact us at Real Estate Connections, where we provide the best San Jose property management that you’ll find in the local area.
And, if you’d like to buy an investment property in Sacramento, we invite you to contact the talented team at Sunburst Properties.