7 Reasons Why San Diego Is one of the best place to buy Investment Property
1. Rentability
It is a great time to be a landlord but horrible time if you a looking to rent in San Diego. Vacancies are at the low rate of 4.1 percent for San Diego County. If your rental property is in fairly good condition and priced right, you will get multiple applications.
2. Rising Rents
According to an analysis of rental prices of single family homes by real estate data provider RentRange, San Diego ranked the 10th place where rent is growing the fastest. Rents in San Diego increased 13.6% between the third quarter of 2014 and the third quarter of 2015. The San Diego County Apartment Association reported even higher rent increase, 20% up over a year ago, 44.6% up from 2005.
Rental prices nationally have grown at roughly twice the pace of average hourly wage growth, which was a paltry 2.1 percent over the past year. Rising Rents means better cash flow.
Rental prices nationally have grown at roughly twice the pace of average hourly wage growth, which was a paltry 2.1 percent over the past year. Rising Rents means better cash flow.
3. Rising Property Value
San Diego County home prices rose 0.6 percent between August and September, and are up 6.6 percent since September 2014, according to the Standard & Poor’s Case-Shiller Home Prices Indices. The monthly rise was one of the fastest among 20 large real estate markets included in the indices, while the annual climb ranked seventh. The indices were created by taking the cost of housing in each market in January 2000, assigning them a value of 100, and tracking the subsequent rise and fall. San Diego’s mark in September was 216.62, reflecting more than a doubling of home prices in nearly 16 years. The rate of increase is the nation’s second fastestbehind Los Angeles.
4. Population Growth
Population growth is a significant factor in the rising demand. The county’s population grew by an average of nearly 33,000 people annually over the past two years, according to the San Diego Association of Governments estimates. Some of this is natural growth — more births than deaths — while some of it is probably also driven by new employment opportunities that have attracted new residents from out of town. The California Department of Finance predicted that San Diego County’s population will grow by 31 percent to hit 4.07 million people by 2060 (. Due to the lack of available land to develop, I do not see the kind of overbuilding that is expected in several other same-size metropolitan markets.
5. Short-term Vacation Rental Opportunities
With over 12,000 short term vacation rentals in the area, San Diego is rapidly becoming the fastest growing market in the country. According to Pillow, Short-term Vacation Rental Investors could be earning thousands more from their rental property. One beach community short term average rent is $4896, compared with only $1761 for long term rents. However, cities and communities in San Diego County have passed or will attempt to enforce restrictions on short-term rentals. If you are a Short-term Vacation Rental Investor, you have to pay attention to new regulations.
6. Out-of-town Investor Friendly
One of investors we know could not resist to purchase a Fixer house out side of California because it was so cheap. He thought he could fix and flip it. It was an online auction, he did not have time to visit so bought it without seeing it. It turns out that this house is in the very high crime area. It is so high that no contractor or real estate agents would go there. In San Diego, we do have some areas that have higher crime rates than the others but not to this extent. We always advise you to get know the area before purchasing but not having too high crime area makes San Diego out-of-town investor friendly.
7. Climate
San Diego has on average 146 sunny days and 117 partly cloudy days a year, we enjoy mild, sunny weather throughout the year. Climate is so mild that many rental properties do not have Air conditioning, which is one less appliance to worry about. Hurricanes are very rare and heavy snow and ice are very very rare in the wintertime. From a real estate investor stand point, you can expect the life expectancy of exterior materials such as roofs to last longer. If you install a tank-less water heater and Drought-Tolerant Landscaping, you will have a relatively maintenance-free rental property. Although we do have some floods that damage the property now and then, it is easy to avoid those locations. Just ask the neighbors.
Do you think of any other cities good for rental investment? Leave a comment!
Mark Kunce - Keller Williams San Diego Metro - The My Home Team
