House Investment Tips for the Los Angeles Market
Every housing market has its own nuances. If you’re just starting out in the Los Angeles market, these house investment tips should help you.
When Thomas Edison began registering for patents during the late 1800s, the film industry took notice and ran for the hills — Beverly Hills, that is.
Once again the city of Los Angeles is growing. More development projects are beginning every day as hopeful residents flock to the city.
Today, many people come to LA for house investment. They want to get a piece of this invigorated market before all the best deals are scooped up. If you are reading this article, then it seems you are among these forward-thinking investors.
As a massive and dynamic region, watching real estate trends in LA is sometimes difficult, so keep reading for tips on how to finish first in the real estate market of LA.
1. Try an Up and Coming Neighborhood
It would be nice to have one of the most famous zip codes in the country, but other factors can matter as well. Buyers will want a well-taken care of property that has been updated to today’s standards.
Luckily, there are many up and coming neighborhoods in the LA area that would love for you to call them home. Keep reading to learn about the top four best neighborhoods for investors to purchase in.
All around the city investors are scooping up properties seemingly overnight.
One of the best areas to buy in is Inglewood if you’re looking for a good deal. It has a great location, conveniently nestled right by both the 405 and 105 freeways. It is also convenient to almost anything on the west side of LA via the main thoroughfares of La Cienega and La Brea.
This location also is incredibly convenient to the airport and is home to the city’s brand new NFL team, the Rams.
Today investors can scoop up a single-family home in Inglewood for about $450,000, much lower than the city average of $632,000.
Just north of downtown Long Beach lies Wrigley, a neighborhood that has really had its ups and downs over the years.
Unfortunately, this community was among the hardest hit by the mortgage crisis and has had trouble recovering ever since.
Today investors are choosing Wrigley for its competitive home prices in the range of $525,000. If you are looking for a midrange investment project, Wrigley could be the place for you.
For those who would like a more reasonable option than the shocking sticker prices of Highland Park, Atwater Village, and El Sereno, there is Cypress Park.
Young professionals and first time home buyers are flocking to the charming early 20th century homes located at the foot of Mount Washington. Once considered to be too far from the city center, urban sprawl has allowed the landscape to develop a hive of activity in the area.
Once considered to be too far from the city center, urban sprawl has allowed the landscape to develop a hive of activity in the area.
If you are looking to make a house investment in Cypress Park, you can expect to pay somewhere in the neighborhood of $550,000 for a single-family home.
If you aren’t looking to spend as much as you would need to live in Cypress Park, Wrigley, or Inglewood, City Terrace provides a quick commute both to downtown (ten minutes away), and to the thriving commercial areas of El Sereno, Alhambra, and South Pasadena on the east side of Los Angeles.
If you choose to live in City Terrace you can expect to find a two or three-bedroom home in the range of $300,000-400,000.
The city of Hawthorne is the 87th largest community in California and acts as a hallway for surrounding cities including Inglewood, Redondo Beach and Manhattan Beach, all of which are also on the rise. Median home value in Hawthorne is in the high 400,000 range with roughly 30,000 total homes and apartments currently available.
2. Look for Tax Benefits
Uncle Sam has sweetened the pot for would be home buyers in Los Angeles by providing several incentives.
The first is helpful to lower the risk of house investment. If any of the value has depreciated, you will be able to write off that depreciation as a tax deduction come April.
You will also be able to take advantage of the “necessary and ordinary” deductions that all business owners are entitled to, since real estate investment is considered a business. This policy may help with your mortgage interest, insurance, and maintenance requests.
3. Search House Investment Properties Wholesale
If you are a savvy shopper, you will find the best deal possible on home investment by looking for wholesale properties.
With the right team in place, you should be able to scoop up a dwelling in need of intensive rehab for pennies on the dollar.
This option is not for everyone because you will need to have extensive knowledge of the real estate in the area in order to make an informed decision on these kinds of properties.
But if you are willing to hunt for that diamond in the rough, run the numbers, then you can decide if the rehab is worth the cost.
4. For Top Dollar, Focus on Location
The general rule for purchasing an investment property in LA is that you should buy the cheapest home on the best street. This will give you the best opportunity to build equity at a staggering rate.
Once you complete your projects, you will be able to sell your rehabbed home for top dollar, and someone else’s house will become the ugly duckling.
Ready to Invest?
Waiting to make an investment is the surest way to lose out on potential revenue, so don’t be afraid to take a calculated risk.
If you are ready to check out some properties, or just want to learn a little more about the current market in LA, contact us today. We have helped hundreds of clients make solid, profitable, commercial real estate investments and we would love to do the same for you!