5 Rental Property Investing Trends in Los Angeles

Rental Property Investing

Investing in real estate is a great way of diversifying and increasing your income. Whatever money you have to spare is likely to bring you dividends should you choose to invest in real estate wisely.

A potentially lucrative way of investing in real estate is through investments in rental properties. Rental properties are a great way to earn income on the side and when done right, will almost instantly bring you results, and what better place to invest in real estate than in the City of Angels itself?

At some point in time, most of us might have probably thought of or daydreamed about living in Los Angeles. Who wouldn’t want to live where the biggest stars in the world can be found, right? Plus, Los Angeles has the perfect concoction of residential areas, commercial centers, and recreational venues which makes it highly attractive for people from virtually any walk of life.

Rental Property Investing

As the home of Hollywood and due to its status as a cultural hub, Los Angeles is an enticing destination for people who aren’t looking to settle down just yet. Some may think of living in Los Angeles as perhaps just a phase in their life that they’d want to go through and understandably so. Los Angeles is a great place to spend our young and wild years.

Because of this, there’s a lot of potential in investing in rental properties for the regular influx of people who want a taste of the L.A. lifestyle.

Of course, the real estate industry is inherently tied to the circumstances that we live in these days. 2020 has brought about a seismic shift in the way the world lives, and it’s bound to affect the real estate industry. This is why it’s important to keep track of the trends in the industry if you’re looking to invest, so that you work with as much information as possible in deciding where to put your hard-earned money. It’s also important to note that despite the cultural status of Los Angeles, it’s still home to regular people who are affected by various crises and can benefit from affordable real estate as well.

1. There’s a housing shortage

Despite the dreamy presentation of Los Angeles in various media, from television, film, and even video games, there’s a harsh reality that comes with the city’s star power. Not everyone has the luxury to live like the stars, and it shows. As of 2019, there were 59,000 homeless people in Los Angeles, and part of it is because of the exorbitant housing prices. Los Angeles is known to have the least affordable housing market in the country.

The housing shortage in Los Angeles which is but a part of the protracted housing crisis in the entirety of California is an important factor in considering whether you would want to invest in L.A. real estate, and how you would want to go about it if you do.

2. Demand for rental property is increasing

2020’s coronavirus outbreak has taken a toll on the entire world’s economy, and the rental market in Los Angeles is no exception. Rental prices in Los Angeles have dipped significantly for the first time since 2010. The law of supply and demand must mean that lower prices will result in increased demand, but that would not necessarily be the case given the widespread loss of jobs caused by this pandemic, right?

However, there’s hope for the rental market as the world recovers from the pandemic. People will eventually respond to the dip in rental property prices and landlords are sure to benefit from the increasing demand in rental properties. 

3. Passive income source

Investing in rental properties is ideal for investors who are looking for a source of passive income. As of February of this year, the average rent in Los Angeles is 2,524 dollars a month. How great would it be to earn 2,524 dollars a month without practically doing anything? It’s indeed tempting to invest knowing how much you can make, but putting the money in is the easy part. Knowing how to attract and retain renters is essential.

4. No real estate taxes

People may have an affinity to renting as opposed to permanent housing because renters are not required to pay real estate taxes. You can use this to your advantage when investing in rental properties over other types of real estate. This is especially helpful in places like Los Angeles where the high cost of living is a deterrent and people have more incentive to rent instead of own.

5. Flexibility of location

Los Angeles offers a variety of residential areas and neighborhoods where you can invest in rental properties and in turn attract potential renters. People who are looking to rent have a wide selection of areas to choose from depending on their personal needs, lifestyles, and budgets, and this applies to those who are looking to invest in rental properties as well.

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