Property Management Blog

Reasons to Invest in California Real Estate

Pinnacle Property Management - Friday, August 6, 2021

Have you heard of the benefits of investing in California real estate? The state offers plenty of opportunities for property owners to see great returns on their investments!  

Investments come in all shapes and sizes; from stocks to bonds to bitcoin. But regardless of the kind of investment, what investors are really looking for is an option that offers them security, regular dividends, and a higher-than-average return on investment. 

One form of investment that ticks all these checkboxes is real estate. Investing in real estate offers you a hedge against economic shocks. It also offers regular earnings in form of rent as property is a good source of passive income and has the possibility of appreciating in value. 

For you to reap all the benefits that come with property investing, you must sink your resources in the right market. The California real estate market has been the target for many investors over the years and this article will unpack why! 

Factors that Influence California Real Estate

Some of the main factors that significantly affect real estate in California have been highlighted below: 

A Vibrant Economy

The number of Fortune 500 companies that are set up in California. Some of the notable mentions include Oracle, Disney, Apple, Intel, and Google. And thanks to the increased demand for their services by locals and the international community, these companies are bound to grow. 

If you are looking to invest in an area with a vibrant economy and job market this is one that you can benefit from. Low unemployment rates bode well for you as the landlord since you are confident that your tenants can meet their rental obligation without much hassle. 

High Demand for Property 

Almost on a daily basis, professionals are moving into the state to take advantage of the numerous job opportunities. This means a wider pool of prospective tenants to choose from.

One characteristic of property investing that you can take advantage of is its slow reactive nature. With the increase in renters, there is strong demand for rental units. Despite this increase in demand for properties, there is not much space to build new accommodation. 

This increase in demand with the slow construction of new options means rental spaces are at a premium. Rental property owners can enjoy a strong and consistent ROI, something that everyone wishes they can earn from a rental property. 

Strong Tourism Market 

Even if you are an out-of-state investor, you can appreciate the various sights, attractions, and activities in California. You might even have come before with your loved ones. Now that you are considering investing in real estate, this is another good reason why you should invest in California. 

With California’s amusement parks, entertainment hotspots, beaches, and other exciting attractions, the State attracts millions of visitors annually. While they might be coming for different reasons, they share one thing in common, the need for accommodation. Looking to save on cost, more and more tourists are looking to short-term vacation rental homes instead of the traditional hotel option. 

Instead of leasing out your property traditionally, you can always choose to invest in a market that has a steady supply of short-term renters. There are also several apps and platforms in the market that you can choose from like Airbnb, and Expedia are just to name a few. 

Favorable Property Taxes 

Owning and leasing out property is like running a business. You must keep a keen eye on cash flow, your income, and expenses. This means you also have to pay taxes and keep diligent bookkeeping records. 

The State of California’s property taxes might not be the lowest in the country, but compared to other states like Washington and New Jersey, the Golden State has favorable rates. As a rental property owner, this can improve your cash flow! 

Appreciation of Property Values 

One of the benefits of investing in property is its appreciation in value. This can be attributed to the increase in demand for properties and their limited supply. The appreciation in property value however occurs within markets that are active. It’s important to capitalize on this by ensuring that your amenities are upgraded and your rentals are well maintained.

Best of all, after enjoying years of steady flow of rental income, you can decide to sell your California property at a significantly higher price.

Bottom Line

Sinking your funds into real estate is a good option for any investment, especially when the market is performing well. With its strong job market, diverse tourist options, and high rental demand, California real estate investment is a no-brainer. 

Operating at the highest professional standards, Pinnacle Property Management has been offering investment and property management services for the past 30 years. Investors rely on us for our sound and professional advice that is backed by in-depth research and local, contextualized knowledge.  

If you would like to learn more about our property management services and how we can help you maximize your returns on investment, contact us today! Our team of real estate experts will gladly answer any questions you may have. 

Pinnacle Property Management
CA DRE # 01905815
22700 Crenshaw Blvd.
Torrance, CA 90505
Ph: (310) 530-0606
Fax: (310) 626-9786

We are open from 8:30am to 5:00pm M-F.

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