Most financial experts agree that investment property is still one of the safest places to put your money, and offers a consistently high rate of return.
In the residential market, real estate provides many investors with a healthy financial return that’s secured by the property itself.
Why Real Estate Is Always a Sound Investment
Unlike stocks, bonds and other popular investment vehicles, buying real estate provides you with a tangible asset.
While you use your investment as a residential rental or lease property, it will continue to appreciate in value. This provides a high rate of return on your investment over time. And when you’re ready to place your money elsewhere, you can sell the property and move on.
Of course, commercial real estate investing is always an option as well. This typically requires a larger outlay of cash and a deeper understanding of the market. Most financial professionals recommend leaving the commercial market to those who truly understand it and have the proper appetite for risk.
The Southern California Market Remains Strong
Although other parts of the country are still recovering from the economic crisis of the last decade, Southern California remains extremely strong.
Because real estate values remain consistently high in our area, many people are unable to purchase their own homes. Consequently, they enter and often stay in the rental market.
More than almost any other area, our rental prices also remain consistently high in comparison to other regions.
Be Wise with Your Investments
Like any type of investment, purchasing real estate for financial gain requires careful thought and planning, along with professional and legal advice.
Global economic conditions can always change, affecting the viability of any financial investment. The potential for vacancy between tenants is also a common concern. However, using the services of a professional property manager can help offset this possible pitfall.
Do Your Homework
Be sure you conduct an exhaustive level of due diligence. Have a licensed residential appraiser inspect and value any potential investment. Review the rent history and vacancy rates in the area, and consider how a shift in the local economy may affect your financial health. If a single large employer in the area decides to pull up stakes, your financial well-being may be compromised.
Finally, before you jump into the real estate investment market, talk with your attorney, CPA and financial advisor, and evaluate your potential cash flow as it relates to rental property. If you still believe this is the market for you, make sure your next call is to a licensed Realtor® experienced in your area of interest.
The Edie Israel Team understands the potential risks and rewards that come with any real estate purchase or investment. Contact us today and let us answer your questions about purchasing an investment property in Southern California.