The California real estate market is seen by many investors as one of the best places to invest in real estate. Why it this so? The location is one of the most preferred destination points by many travelers as well as real estate investors due to nice weather and various leisure activities offered all year long. Moreover, the population in the state of California grows constantly due to the increasing rate of job opportunities. Thus, many people consider moving to California long term. Exactly because of such factors, California is seen as the best place where to invest in real estate.
You may be involved in residential real estate investing, such as traditional rentals, for example. Thus, you might be wondering what are the best places to buy rental property in California? Before we provide you with the list of the best places in California for traditional rentals, we will explore the California housing market 2018 first. Additionally, we will present you some key factors for buying rental property. Curious? Keep on reading to find out all about the best places to buy rental property in California.
#1 Insights of the California Housing Market 2018
When considering the California real estate market as your new target for residential real estate investing, you should keep the following things in mind. Knowing the aspects of the California housing market 2018 will give you a competitive edge when selecting the best place to buy a house in California. Are you eager to learn more about the California real estate market? Make sure to read “The Best Places to Buy Vacation Home in California in 2018.”
California Housing Market 2018: Homebuyers Are Leaving High-Tax States
The reason for homebuyers to leave states like California is due to the new tax reform as well as the limitations on state and local tax (SALT) deductions in areas where taxes are at very high rates. Real estate investors are leaving for places where they could get better homes for more affordable prices. According to Redfin’s migration report, people tend to leave expensive coastal cities for more affordable mid-tier cities like Sacramento, for example. You should keep this information in mind when planning on buying investment property.
California Housing Market 2018: Buying Rental Property Gets Harder
Home-sellers will also be affected by the new tax reforms. However, why would a home seller not be willing to sell his/her investment property in California? This is so due to the increased timeframe in which a homeowner must live in their property before selling it in order to get the advantage of the tax deductions on the capital gains.
California Housing Market 2018: Millennials Are Popularizing Urban Suburbs
Many high-income millennials are demanding a new type of neighborhood in the California housing market 2018. This has resulted in the formation of “Urban Suburbs” – high-density neighborhoods in suburban areas that are rich with urban qualities such as restaurants, public transit, etc. Such millennials desire an urban lifestyle as well as high-rated schools. However, what is important to note is that these millennials are able to afford it! Consequently, this led to the introduction of new Urban Suburb areas. Real estate investors should keep a close eye on such neighborhoods when considering where to invest in real estate.
California Housing Market 2018: Real Estate Investors Will Sell Homes Faster than Ever
The supply of investment properties in the California real estate market is low. That is why the home selling process will be even faster. Let’s explore what will happen with the investment property in California that is for sale. In 2017, the housing market in California was fast- 25% of homes were sold within two weeks. In 2018, it is expected that not only the best real estate investments but also average properties are going to be sold even faster. Consequently, whenever a real estate investor places his/her property for sale, it is possible that it will sell within two weeks. Additionally, if ranked as one of the best real estate investments, it might be sold even faster.
#2 What to Keep in Mind When Buying Investment Property for Long-term Rentals
Knowing everything about the California housing market 2018 is not enough. You will not succeed in real estate investing if you do not know how to find the best investment property in California. So, what should you do in order to locate the best places to invest in real estate? You should use Mashvisor’s investment property calculator! It is the ultimate real estate investing tool that eliminates the need to perform real estate market analysis as well as investment property analysis.
Moreover, Mashvisor’s investment property calculator uses predictive and traditional analytics in order to provide real estate investors with reliable and accurate projections of the main real estate investing metrics. Interested in how easily you can indicate the best places in California with Mashvisor’s investment property calculator? Make sure to read “This Is How the Investment Property Calculator Eliminates the Need for Real Estate Market Analysis.”
#3 Top Five Best Places in California for Traditional Rentals
Residential real estate investing, especially traditional rentals, is seen as one of the best real estate investment strategies. Moreover, buying rental property for long term purposes in the California real estate market is a good decision. Why so? Well, the reason is money. Successful real estate investors are selecting the best real estate investments in the best rental markets.
At this point, you already know which tools to use to select the best investment property in California. However, what are the best rental markets? In order to ease the decision-making process, we have selected the top five cities in the California real estate market for your first or next long term investment in the California housing market 2018. Curious to learn more about the best places to invest in rental property in California? Make sure to read “California is Emerging as the Best Place to Invest in Real Estate in the Years to Come.”
- Median Property Price: $79,900
- Traditional Rental Income: $1,550
- Traditional Cash on Cash Return: 16.52%
- Traditional Cap Rate: 16.52%
- Median Property Price: $123,000
- Traditional Rental Income: $2,264
- Traditional Cash on Cash Return: 14.06%
- Traditional Cap Rate: 14.06%
- Median Property Price: $85,000
- Traditional Rental Income: $1,330
- Traditional Cash on Cash Return: 12.84%
- Traditional Cap Rate: 12.84%
- Median Property Price: $99,995
- Traditional Rental Income: $1,404
- Traditional Cash on Cash Return: 9.51%
- Traditional Cap Rate: 9.51%
- Median Property Price: $94,500
- Traditional Rental Income: $1,483
- Traditional Cash on Cash Return: 8.99%
- Traditional Cap Rate: 8.99%
To learn more about all aspects of buying investment property, continue reading our blog.