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Los Angeles

The coastal Southern California City of Los Angeles is better known by its initials, LA. With over 4 million residents, Los Angeles is the biggest city in California in regards to population and the second in the nation, after New York City. While the Los Angeles real estate market typically enjoys positive population growth, it doesn’t surpass the national growth rate. This can likely be attributed to the negative net migration that Los Angeles has been experiencing for the past 5 years.

 

It’s believed that a high cost of living and a lack of affordable housing in the Los Angeles housing market is the cause of the negative net migration. However, for a Los Angeles real estate investor who can afford to buy and own rental properties in the city, there is high rental demand. According to NeighborhoodScout, around 64% of LA residents are tenants, which means that buying a rental property in Los Angeles makes for a good real estate investment.

 

The economy is surprisingly not hindered by the slow population growth in Los Angeles. The job market continues to grow at a rate higher than the national. Even though Los Angeles is famous for being home to Hollywood and has been dubbed the Entertainment Capital of the World, its economy goes far beyond the entertainment industry. The city is actually part of the largest manufacturing center in the United States with over 300,000 manufacturing jobs in the Los Angeles-Glendale-Long Beach metro area. Other key industries in LA include banking and financing, healthcare, high-tech research and development, education, architecture, engineering, and both commercial and residential real estate construction.

 

The Los Angeles real estate market was named one of the Top 20 Markets to Watch in 2019 by the annual PWC real estate report. In the Pacific Region of the US, specifically, it comes in only second to Seattle in terms of overall real estate prospects.

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Los Angeles  Real Estate Investment Performance
Facts and Market Trends in Los Angeles
Homes For Sale3,968
Airbnb Properties4,441
Rental Properties13,768
Traditional Vacancy rate4.70%
Airbnb Occupancy Rate63.45%
Mashmeter68.41%
Median Price$879,997
Median Rent Price$3,701
Price/sqft$885
Median Days on Market73
Price to Rent Ratio25.6
Average Cap Rate
Airbnb1.36%
Traditional1.84%
Average Rental Income
Airbnb$3,673
Traditional$3,100
 
Median Household Income$54,432
Population3,792,621
Transportation in Los Angeles
67 / 100
Somewhat Walkable
53 / 100
Good Transit
55 / 100
Bikeable
Los Angeles  Rent Prices
RENTAL STRATEGY STUDIOS 1 ROOM 2 ROOMS 3 ROOMS 4 ROOMS
Airbnb$1,795$1,951$2,888$4,725$7,668
Traditional$1,650$1,696$2,543$3,823$4,621
Los Angeles, CA - Homes for Sale - Newly Listed
$430,000
MLS SB21078290
1519 W 22nd Place
Los Angeles, CA 90007
West Adams
Single Family Residential
3 beds1 baths1,288 sq.ft.
CAP RATE
Trad. 5.68%Airbnb 5.68%
$835,000
MLS SR21077840
17018 Marlin Place
Los Angeles, CA 91406
Lake Balboa
Single Family Residential
2 beds2 baths1,736 sq.ft.
CAP RATE
Trad. 1.56%Airbnb 0.69%
$799,000
MLS 21-717544
14014 Milbank St #5
Los Angeles, CA 91423
Sherman Oaks
Townhouse
2 beds3 baths1,317 sq.ft.
CAP RATE
Trad. 0.97%Airbnb 1.17%
$924,900
MLS SR21076572
14303 Emelita Street
Los Angeles, CA 91401
Sherman Oaks
Single Family Residential
3 beds2 baths1,302 sq.ft.
CAP RATE
Trad. 1.99%Airbnb 4.82%
Top Performing Los Angeles Properties
$1,299,000
MLS DW21033879
3427 Glenalbyn Drive
Los Angeles, CA 90065
Mount Washington
Single Family Residential
3 beds4 baths2,156 sq.ft.
CAP RATE
Trad. 2.51%Airbnb 8.00%
$549,900
MLS 221001211
9317 Thompson Avenue
Los Angeles, CA 91311
West Hills
Single Family Residential
3 beds3 baths864 sq.ft.
CAP RATE
Trad. 4.44%Airbnb 7.99%
$1,379,000
MLS BB21056629
5933 Balcom Avenue
Los Angeles, CA 91316
Encino
Single Family Residential
4 beds4 baths2,402 sq.ft.
CAP RATE
Trad. 2.37%Airbnb 7.96%
$1,199,000
MLS 21-689580
980 Nordica Dr
Los Angeles, CA 90065
Mount Washington
Single Family Residential
3 beds3 baths2,276 sq.ft.
CAP RATE
Trad. 2.01%Airbnb 7.95%
Recently Sold Homes in Los Angeles, CA
$0
MLS
5840 BRENTWOOD STREET
Los Angeles, CA 90003
South Los Angeles
Multi Family
5 beds3 baths1,934 sq.ft.
CAP RATE
Trad. N/AAirbnb N/A
$0
MLS
1442 E 76TH PLACE
Los Angeles, CA 90001
Southeast Los Angeles
Single Family Residential
2 beds1 baths560 sq.ft.
CAP RATE
Trad. N/AAirbnb N/A
$0
MLS DW18292919
13308 TRAUB AVENUE
Los Angeles, CA 90059
Watts
Single Family Residential
4 beds2 baths1,767 sq.ft.
CAP RATE
Trad. N/AAirbnb N/A
$725,000
MLS SR21063537
1197 N Normandie Avenue
Los Angeles, CA 90029
Los Feliz
Multi Family
0 beds0 baths0 sq.ft.
CAP RATE
Trad. N/AAirbnb N/A
Property Value Changes and Real Estate Appreciation in the Los Angeles Housing Market

With the high real estate prices in Los Angeles, it’s natural to see that property appreciation has been significant over the years. According to NeighborhoodScout, Los Angeles properties have experienced a total appreciation of 200.8% since Q1 2000, which is an annual average rate of 6.1%. Typically, housing markets with such high property prices tend to show minimum appreciation once they hit peaks. However, Zillow reports that Los Angeles real estate values appreciated by 4.5% in 2018. So a property investor who can afford to buy an investment property in LA will still enjoy appreciation.

 

The Los Angeles housing market is currently a buyer’s market as there are more homes for sale on the market than people looking to buy. This is forcing property sellers to negotiate, which accounts for the fact that the median price of properties that sold is far below the median listing price. This fact, along with the property appreciation, makes the Los Angeles real estate market a great place to buy investment properties to rent out if you can afford the price tag.

Los Angeles, CA Top Multi Family Homes
$1,625,000
MLS DW21045209
5928 S Hoover Street
Los Angeles, CA 90044
South Los Angeles
Multi Family
beds baths0 sq.ft.
CAP RATE
Trad. 7.77%Airbnb N/A
$699,000
MLS PW21004945
123 E 55th Street
Los Angeles, CA 90011
Southeast Los Angeles
Multi Family
4 beds3 baths1,992 sq.ft.
CAP RATE
Trad. 7.56%Airbnb N/A
$800,000
MLS SB21074516
326 W 70th Street
Los Angeles, CA 90003
South Los Angeles
Multi Family
0 beds0 baths0 sq.ft.
CAP RATE
Trad. 7.53%Airbnb N/A
$1,250,000
MLS DW21018892
700 W 82nd Street
Los Angeles, CA 90044
South Los Angeles
Multi Family
beds baths0 sq.ft.
CAP RATE
Trad. 7.13%Airbnb N/A
Homes Below Median Price in the Los Angeles, CA Real Estate Market
$1,299,000
MLS DW21033879
3427 Glenalbyn Drive
Los Angeles, CA 90065
Mount Washington
Single Family Residential
3 beds4 baths2,156 sq.ft.
CAP RATE
Trad. 2.51%Airbnb 8.00%
$549,900
MLS 221001211
9317 Thompson Avenue
Los Angeles, CA 91311
West Hills
Single Family Residential
3 beds3 baths864 sq.ft.
CAP RATE
Trad. 4.44%Airbnb 7.99%
$1,379,000
MLS BB21056629
5933 Balcom Avenue
Los Angeles, CA 91316
Encino
Single Family Residential
4 beds4 baths2,402 sq.ft.
CAP RATE
Trad. 2.37%Airbnb 7.96%
$1,199,000
MLS 21-689580
980 Nordica Dr
Los Angeles, CA 90065
Mount Washington
Single Family Residential
3 beds3 baths2,276 sq.ft.
CAP RATE
Trad. 2.01%Airbnb 7.95%
Los Angeles Airbnb Growth and Regulations

Opponents of Airbnb in Los Angeles blame the lack of affordable housing and high real estate prices on the growth of the short-term rental industry. With Los Angeles County welcoming 2.7 million guests in 2018, generating $613 million in income for Airbnb Los Angeles hosts, the City Council set out to regulate these rental properties. As of July 2019, non-owner occupied short-term rental properties will be prohibited from being rented out on Airbnb and other vacation rental websites. This means that the operation of Airbnb investment properties is illegal in the Los Angeles real estate market.

 

For a primary residence to operate within the law, the host must live in the Airbnb rental property for half of the year. Short-term rentals will only be allowed to host guests for up to 120 days a year. Airbnb rentals will be subject to the same hotel accommodation taxes present in LA. Airbnb Los Angeles hosts must register with the city to operate legally at a cost of $89 a year and the rental property must meet all rental safety requirements. Properties under rent stabilization or ones that are considered affordable housing may not be listed for rent on Airbnb.

Los Angeles, CA Top Airbnb Homes
$195 per night
$93 per night
$105 per night
Entire home/apt · 2 beds
Studio Cottage, Magical Outdoors
661
$106 per night
Entire home/apt · 1 bed
Super Venice Location!!
656
Los Angeles, CA Homes for Rent
$4,000
MLS SR21078063
22536 Schoolcraft Street
Los Angeles, CA
Canoga Park
Single Family
3 beds2 baths1,516 sq.ft.
$3,400
MLS PW21078988
11820 Verona Lane
Los Angeles, CA
South Los Angeles
Single Family
3 beds3 baths1,716 sq.ft.
$1,800
MLS BB21077995
11598 Cranston Avenue
Los Angeles, CA
Lakeview Terrace
Single Family
1 beds1 baths455 sq.ft.
$3,700
MLS 21-711282
535 Washington Blvd
Los Angeles, CA
Venice
Other
2 beds1 baths1,581 sq.ft.
Los Angeles, CA Open Houses
Open 1 PM to 4 PM
$540,000
MLS PW21073034
1360 Capitol #139
Los Angeles, CA 90731
San Pedro
Condo/Coop
2 beds3 baths1,431 sq.ft.
CAP RATE
Trad. 1.79%Airbnb 3.24%
Open 1 AM to 4 PM
$1,020,000
MLS 320004585
2753 Waverly Drive #1002
Los Angeles, CA 90039
Silver Lake
Townhouse
3 beds3 baths1,661 sq.ft.
CAP RATE
Trad. 2.41%Airbnb 1.68%
Open 2 AM to 5 PM
$1,299,000
MLS DW21033879
3427 Glenalbyn Drive
Los Angeles, CA 90065
Mount Washington
Single Family Residential
3 beds4 baths2,156 sq.ft.
CAP RATE
Trad. 2.51%Airbnb 8.00%
Open 1 PM to 4 PM
$725,000
MLS 21-690868
8180 Manitoba St #133
Los Angeles, CA 90293
Playa Del Rey
Condo/Coop
2 beds2 baths1,340 sq.ft.
CAP RATE
Trad. 2.08%Airbnb 1.77%
Best Los Angeles Neighborhoods for Buying Investment Property
71%
Mashmeter
property price
$1,199,450
Median
cap rate
3.21%
Traditional
4.85%
Airbnb
rental income
$3,213
Traditional
$4,846
Airbnb
homes for sale
110
occupancy rate
71%
Airbnb
70%
Mashmeter
property price
$2,295,000
Median
cap rate
3.08%
Traditional
3.60%
Airbnb
rental income
$5,882
Traditional
$6,892
Airbnb
homes for sale
118
occupancy rate
79%
Airbnb
70%
Mashmeter
property price
$1,485,000
Median
cap rate
3.17%
Traditional
4.18%
Airbnb
rental income
$3,924
Traditional
$5,173
Airbnb
homes for sale
30
occupancy rate
52%
Airbnb
87%
Mashmeter
property price
$597,000
Median
cap rate
8.02%
Traditional
7.37%
Airbnb
rental income
$3,990
Traditional
$3,668
Airbnb
homes for sale
98
occupancy rate
68%
Airbnb
83%
Mashmeter
property price
$650,000
Median
cap rate
6.46%
Traditional
7.07%
Airbnb
rental income
$3,499
Traditional
$3,831
Airbnb
homes for sale
26
occupancy rate
58%
Airbnb