The California real estate market is notorious, on a national and global level, for its high investment property prices. These skyrocketing property prices benefit existing California real estate investors, as the state’s high rental income is partially tied to its property prices. However, these prices are an impediment to new real estate investors with the goal of making money in real estate, because it is difficult to find affordable investment properties. Luckily, there is no need for despair. There are two ways real estate investors could find affordable investment properties in the California real estate market: use Mashvisor’s investment property calculator and invest in Long Beach real estate.
Related: Mashvisor: The Best Rental Property Calculator You Could Ask For
Mashvisor’s Investment Property Calculator
As the title of the blog suggests, we’ll focus on the second option, investing in Long Beach real estate, more than the first, but we’ll briefly discuss the former. With Mashvisor’s rental property calculator, you can search for the most affordable investment properties in any location in the United States. All you’ll need to do is adjust the heatmap to search for such properties. You can also search for properties with the highest rental income, Airbnb occupancy rates, return on investment, and more. To get yourself started with Mashvisor’s services with a 14-day free trial and a 20% discount, click here!
Why Is the California Real Estate Market So Expensive?
Before we dive into why you should invest in Long Beach real estate market 2018, let’s talk about how the California real estate market became so expensive in the first place. While this is an issue that can be very complex, the answer is quite simple. The supply and demand of the California real estate market have led to surging investment property prices. With such high demand from an increasing population and a shortage of investment properties, property prices have tremendously increased in California. Property prices would stabilize if the number of new units in the state reaches 180,000 per year, according to the California Department of Housing and Community Development. Unfortunately, the number of new properties over the last decade has averaged less than 90,000, or less than half of the required number.
Long Beach Real Estate – An Affordable Option in California Real Estate
Luckily for investors and aspiring homeowners, the Long Beach real estate market is home to many affordable investment properties. Here is the city’s data, according to Mashvisor’s investment property calculator, which includes the median property price and profitability statistics for both traditional and Airbnb investing.
Median Property Price: $827,550
Traditional
Rental Income: $3,052
Cap Rate / Cash on Cash Return: 1.12%
Airbnb
Rental Income: $2,360
Cap Rate / Cash on Cash Return: 0.96%
The median property price of Long Beach real estate is $827,550. The average rental incomes for traditional and Airbnb investing are $3,052 and $2,360, respectively. Not only is the Long Beach real estate market 2018 a relatively affordable market, it is also a very lucrative one. The added profitability bonus makes the Long Beach real estate market a more desirable, and compatible, destination for new investors than many of California’s top markets. For comparison, Long Beach is more affordable and profitable than Los Angeles, Oakland, and San Diego. While it isn’t as profitable as San Jose, San Francisco, and Santa Barbara, it is much cheaper than them, as the median property price in these markets ranges from 1 million to 1.5 million.
Related: Investing in Multi Family Homes in Los Angeles vs. Long Beach: Which Option Should You Go For?
Long Beach Real Estate – Traditional Investment Properties
The Long Beach real estate market is suitable for both investment strategies, but it still favors traditional investing. The city’s economy is rising, especially due to its shipping port, which is the second busiest container port in the country. These factors, along with several others, make buying an investment property for traditional investing an excellent investment in Long Beach. The most affordable and best neighborhoods in Long Beach for traditional investing are Willmore City, Alamitos Beach, and Saint Mary’s.
Long Beach Real Estate – Airbnb Short Term Rentals
Airbnb short term rentals are also profitable in Long Beach real estate. The city does not have restrictive Airbnb regulations, which aids in renting out properties. Long Beach also has the well-known Californian weather and beaches, which further drives Airbnb investment in the city. The best neighborhoods in Long Beach for affordable Airbnb short term rentals are East Village, Alamitos Beach, and Carrol Park.
Related: Real Estate Investing: Traditional vs. Airbnb
Best Neighborhoods in Long Beach for Affordable Investment Properties
1.) Willmore City
Median Property Price: $679,339
Traditional
Rental Income: $3,407
Cap Rate / Cash on Cash Return: 1.19%
Airbnb
Rental Income: $1,460
Cap Rate / Cash on Cash Return: 0.89%
Occupancy Rate: 55%
2.) Alamitos Beach
Median Property Price: $859,754
Traditional
Rental Income: $3,273
Cap Rate / Cash on Cash Return: 0.75%
Airbnb
Rental Income: $1,961
Cap Rate / Cash on Cash Return: 0.5%
Occupancy Rate: 60%
3.) Carroll Park
Median Property Price: $592,773
Traditional
Rental Income: $2,036
Cap Rate / Cash on Cash Return: 0.77%
Airbnb
Rental Income: $2,307
Cap Rate / Cash on Cash Return: 1.19%
Occupancy Rate: 66%
4.) Hellman
Median Property Price: $883,707
Traditional
Rental Income: $4,190
Cap Rate / Cash on Cash Return: 1.59%
Airbnb
Rental Income: $869
Cap Rate / Cash on Cash Return: 0.77%
Occupancy Rate: 60%
5.) Saint Mary’s
Median Property Price: $896,563
Traditional
Rental Income: $4,074
Cap Rate / Cash on Cash Return: 1.25%
Airbnb
Rental Income: $1,198
Cap Rate / Cash on Cash Return: 0.91%
Occupancy Rate: 56%
6.) East Village
Median Property Price: $589,448
Traditional
Rental Income: $2,256
Cap Rate / Cash on Cash Return: 0.03%
Airbnb
Rental Income: $2,026
Cap Rate / Cash on Cash Return: 0.26%
Occupancy Rate: 58%
All in all, Long Beach real estate is among the most affordable and lucrative rental markets in California. The city is home to many cheap and profitable neighborhoods for both investment strategies. To start searching for and analyzing these properties with Mashvisor, click here!