When you have money to invest, you have many options. Stocks are a traditional option, and you can buy them individually or through mutual funds. Bonds are a similar choice, even if they are a bit different. Commodities, ranging from farm crops to precious metals, are also options on the table. However, real estate is what gets the attention of many.
Real estate investing offers a unique combination of being able to do three things at once. First, you can preserve wealth in the property value while you own it. Second, you can generate income from renting or leasing out a property. Third, you can create more wealth by waiting for market values to go up.
If you’re not sure where to invest, then you should know that California real estate is a good investment.
Real Estate Investing
The nation’s most populous state was a real estate haven for a long time. Hundreds of thousands of people flocked to the state every year for decades, looking to cash in on the American dream. However, housing inventory didn’t keep up, and anyone who owned property could take advantage of the situation.
Things have changed. The state is now losing population to places like Arizona, Texas, Colorado, and Idaho. That’s not to say there isn’t a demand for housing in the California real estate market, but you have to be smarter about it. Even if you can buy a million-dollar home in San Francisco to rent out, you might not find that many renters.
Considerations
If you’re looking to rent out a home, you need to consider two things. First, how many rents can you get out of one property? Second, what is the ratio of renters to homes in that area?
Not every home is set up to be rented out in multiple units. However, if the property is big enough, it doesn’t take much work to set up two or three apartments in a larger home for multiple income streams.
Regarding the local ratio, the number of renters available to properties in San Francisco isn’t necessarily ideal. On the other hand, there are far more renters available with enough income to rent units at current prices in the central valley.