Why Invest in California?
Despite its reputation for pricey real estate, the Golden State offers a spectrum of opportunities for investors who want to get into single family real estate investing. With dramatic beaches, four-season recreational opportunities, sparkling cities, an energetic culture, and a growing population, California is a land of opportunity for many. Its robust, diversified economy is grounded in technology, entertainment, innovation and business services, supporting strong, consistent interest by renters, aspiring homeowners, and active home buyers.
For investors who want to capture returns from rising home values, California has strong momentum. In April 2018, the median sale price of single family homes was $584,460, a 3.5% increase from the year before. Sale prices for condominiums and townhouses also continued a steady rise, reaching a median of $476,010, an increase of 9.1% from the year before.
And, houses sell quickly: the median time on market was only 15 days.
Real estate investors in California are aligning with the eighth-largest economy in the world, at over $2.2 trillion. (If California was a country, it would rank just below Brazil and just above Russia.)
Investment Considerations for California Real Estate
- A Strong Job Market- With 54 of the Fortune 500 companies headquartered in California, like Google, Apple, Disney, Oracle and Intel among others, California is positioned for continued job growth. High employment rates draw renters and buyers and, for investors, enhance the likelihood of consistent cash flow.
- Low Property Taxes- Though not the lowest in the country, California has favorable property tax rates, which will help control investors’ expenses and improve cash flow.
- High Rental Demand- With renters flocking to the golden state for jobs, great weather, fantastic entertainment, and myriad outdoor activities, demand outpaces availability and growth in many California markets. This demand leads to consistent increases in rental rates for owners of income properties.
- Increasing Home Values- The combination of job growth and a world-renowned lifestyle and culture supports home values. People buy where they want to live, and millions of people want to live in California. All of the demand mentioned above also leads to increasing home values.
What are the Best Markets to Invest in California?
California offers a variety of real estate investment opportunities throughout the state, but some of the best choices for single family rentals are near major metros such as Los Angeles, San Jose, Bakersfield, and San Diego.
Getting Started in Real Estate Investing? INVESTimate® Can Help
INVESTimate® is the leader in residential real estate investment. With the use of big data and machine learning, we analyze information on millions of single family homes in California; and across the United States and calculate home values RENTestimate for every property in California. If you’re looking for the best investment properties across the country, visit our comprehensive investment site.