If you are thinking about investing in Los Angeles real estate, you should do it now. Rent will keep going up in the next few years and apartment developments have the most potential for long-term investments. Since house prices are also rising, it is becoming less likely for someone to buy a home. Fix and flips are a good idea for a short-term investment but if you are looking for a long-term investment, commercial is the best way to go.
Here’s what Forbes has to say:
“The population isn’t growing very fast, but home prices are – that’s partly because LA is running out of room. Growth is mainly in the cheaper, outer communities in Riverside and San Bernardino. Home prices were up 30 percent in the last three years – although it’s difficult to separate real home sales from the boom in foreclosed subprime properties. Whatever the cause, you can expect prices to go higher in the next few years, so don’t wait if you plan to buy. In LA County, prices are up the most in West Hollywood, the least in Torrance.”
Buying and holding an investment property is not the smartest decision at the moment though you may want to consider a multi-family house to rent out.
Rent in LA is going to keep going up but renting is a lot cheaper than buying a home so many (especially younger individuals) are opting to rent instead of buy. Before you invest, read this advice from American Apartment Owners Association.
“RBR says to be aware that in the Los Angeles market, rent stabilization laws dont apply to single-family homes. With improvements made, investors may be able to charge more rent than anticipated for this type of property. Their tip: buy a single-family home as an investment over a two to four unit rental property. Another reason for doing so is that home renters tend to stay longer than apartment or condo dwellers. Less turnover may mean less cost to the investor. And, many single-family home renters pay their own utilities, which means less monthly outlay for the investor.”