The California real estate market contains many of the most profitable investment locations in the US housing market. One of the more underrated markets in the state is the Long Beach real estate market. However, as a new decade approaches, investors are asking “Is now a good time to invest in Long Beach real estate?” The answer is yes! If you want to take advantage of what the Long Beach housing market will offer in 2020, start looking for an investment property now. We’ll explain why this is a smart move by taking a look at the Long Beach real estate trends of 2020.
Related: 5 California Housing Market Predictions for 2020
Long Beach Real Estate Trends for 2020
There are four promising market trends that highlight why Long Beach real estate investing is a good choice for 2020:
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Both the Traditional and Airbnb Rental Strategy Will Be Lucrative
The bread and butter of residential real estate profitability is rental income. Fortunately for Long Beach real estate investors, the market is projected to be profitable for both traditional and Airbnb rentals in 2020. This is evident from the current rental income data for the average Long Beach investment property. According to Mashvisor’s investment property calculator:
- Average Traditional Rental Income: $2,487
- Average Airbnb rental income: $3,623
These income figures are above average relative to the California real estate market.
In addition to the rental income, Mashvisor’s data shows that you can find traditional and Airbnb investment properties with good cap rates as well. Click here to take a look at these properties for sale.
If you’re interested in learning more about how Mashvisor can help you achieve your Long Beach real estate investing goals, click here!
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Properties in the Long Beach Housing Market Are Projected to Greatly Appreciate
Long Beach houses for sale will also benefit from real estate appreciation in 2020. The Long Beach housing market has had a great history with property appreciation post-housing crisis. According to NeighborhoodScout, Long Beach real estate appreciated by over 70% in the last 10 years. This places Long Beach in a unique position as these figures land the real estate market in the top 10% for national appreciation. The market’s trend of high appreciation rates is not expected to end any time soon. According to Zillow, Long Beach real estate appreciated by 2.5% this year. For 2020, Zillow predicts the average Long Beach real estate investment will appreciate by 3.1%.
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Long Beach House Prices Will Be Relatively Affordable
The California real estate market is known for its expensive property prices. This is particularly true in the state’s largest cities, which include the Los Angeles real estate market and the San Francisco real estate market. By investing in Long Beach real estate, however, an investor won’t have to pay such astronomical price tags. According to Mashvisor, the city’s median property price is $783,409. While this is significantly higher than the national median, it is affordable relative to California’s major cities. Los Angeles, Oakland, San Diego, San Jose, Santa Barbara, and San Francisco all have median prices that are higher than Long Beach house prices.
Even though Long Beach investment properties will experience high appreciation and are located in a warm seller’s market, they will remain relatively affordable in 2020.
Related: Long Beach Real Estate: A More Affordable Option in California Real Estate
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Airbnb Will Be Legal in the Long Beach Real Estate Market 2020
What if you’re planning to invest in Long Beach real estate for Airbnb in 2020? Luckily, Airbnb short-term rentals are legal in Long Beach. While Long Beach Airbnb laws were nonexistent in the past, an ordinance by the City Council legalized short-term rental activity. The ordinance, passed in December 2018, in its entirety can be found here. We’ll focus on the most notable Long Beach Airbnb laws in this blog.
For starters, Airbnb Long Beach investors are permitted to use a non-primary residence or non-owner occupied rental for Airbnb. Airbnb regulations also require hosts to register their rentals with the city. A business license is required as part of the registration. Hosts must also impose quiet hours from 10 pm to 7 am on outdoor pools and hot tubs in the rental properties. Finally, Airbnb hosts must pay a 12% Long Beach Transient Occupancy Tax for their short-term rentals.
Best Neighborhoods in Long Beach for Traditional Rentals
If you want to buy a traditional rental property, where should you invest in Long Beach real estate in 2020? According to Mashvisor, these are the best neighborhoods:
Saint Mary’s
- Median Property Price: $883,254
- Price per Square Foot: $387
- Price-to-Rent Ratio: 31
- Traditional Rental Income: $2,354
- Traditional Cap Rate / Cash on Cash Return: 1.8%
Bixby Knolls
- Median Property Price: $927,414
- Price per Square Foot: $425
- Price-to-Rent Ratio: 21
- Traditional Rental Income: $3,645
- Traditional Cap Rate / Cash on Cash Return: 1.5%
Los Cerritos Area
- Median Property Price: $707,865
- Price per Square Foot: $387
- Price-to-Rent Ratio: 21
- Traditional Rental Income: $2,782
- Traditional Cap Rate / Cash on Cash Return: 1.4%
University Park Estates
- Median Property Price: $456,758
- Price per Square Foot: $334
- Price-to-Rent Ratio: 12
- Traditional Rental Income: $3,260
- Traditional Cap Rate / Cash on Cash Return: 1.4%
Best Neighborhoods in Long Beach for Airbnb Rentals
As mentioned in the trends above, Airbnb Long Beach rental properties will be profitable as well in 2020. To get the most out of Airbnb short-term rental properties, we recommend investing in the following Long Beach neighborhoods:
North Long Beach
- Median Property Price: $521,352
- Price per Square Foot: $411
- Price-to-Rent Ratio: 22
- Airbnb Rental Income: $4,058
- Airbnb Cap Rate / Cash on Cash Return: 4.3%
- Airbnb Occupancy Rate: 77%
Saint Mary’s
- Median Property Price: $883,254
- Price per Square Foot: $387
- Price-to-Rent Ratio: 31
- Airbnb Rental Income: $3,799
- Airbnb Cap Rate / Cash on Cash Return: 3.5%
- Airbnb Occupancy Rate: 72%
Los Cerritos Area
- Median Property Price: $707,865
- Price per Square Foot: $387
- Price-to-Rent Ratio: 21
- Airbnb Rental Income: $4,463
- Airbnb Cap Rate / Cash on Cash Return: 3.2%
- Airbnb Occupancy Rate: 63%
Lakewood Village
- Median Property Price: $897,369
- Price per Square Foot: $443
- Price-to-Rent Ratio: 26
- Airbnb Rental Income: $5,037
- Airbnb Cap Rate / Cash on Cash Return: 3.2%
- Airbnb Occupancy Rate: 75%
Washington School
- Median Property Price: $686,322
- Price per Square Foot: $386
- Price-to-Rent Ratio: 34
- Airbnb Rental Income: $3,113
- Airbnb Cap Rate / Cash on Cash Return: 3.1%
- Airbnb Occupancy Rate: 64%
Bixby Area
- Median Property Price: $519,271
- Price per Square Foot: $451
- Price-to-Rent Ratio: 22
- Airbnb Rental Income: $3,461
- Airbnb Cap Rate / Cash on Cash Return: 2.9%
- Airbnb Occupancy Rate: 67%
Related: Where to Find Airbnb Data in 2020 for Real Estate Investing
To sum up, the Long Beach real estate market will be a top location in California in 2020. To start searching for Long Beach houses for sale, click here to start your 14-day FREE trial with Mashvisor!
