Rent prices have been on the rise for the last few years, and they’re not showing any sign of slowing down. According to The Los Angeles Times, rent in Los Angeles County was up 2.4% in the first quarter of this year compared to the first quarter of last. On average, people in LA County spend $1,520 a month on rent. As homeownership remains low across the country, renters can expect to see their rent prices go up for at least the next few years, making now an ideal time to consider rental real estate investing.
With a buy and hold real estate investment, investors can take advantage of the fact that both rent prices and home prices are on the rise around the country. Particularly in California, the market is primed for buy and hold investments. The same Los Angeles Times article reports that of the eleven tightest rental markets in the country, seven are in California. Those markets include San Diego, Ventura County, and the Inland Empire. In the Inland Empire, rents have jumped 1.6% in just three months.
Vacancy rates are extremely low in the hottest California counties, which is partly responsible for the steady uptick in rent. In Orange County, vacancy rates are just 2.4%. In Los Angeles County, the number is 3.2%. Things are even worse in San Francisco where the average rent is $2,277.
All of this is despite a wave of apartment and single-family home construction over the last few years. There simply aren’t enough apartments to keep up with the demand in hot California markets.
Buy and hold investors have the opportunity to capitalize on the situation by purchasing a single family or multiunit residence, collecting monthly rent from tenants, and reselling the property for a profit a few years down the line. Buy and hold investing has one of the best risk-to-reward ratios of any type of investment, including fix and flip. Buy and hold investors can also be as hands-on or hands-off as they like, making it ideal for people who have full-time careers or who want to enjoy a leisurely retirement.
To learn more about the many benefits of buy and hold investing, contact ZINC Financial today by calling (559) 326-2509. Our buy and hold loans are among the most competitive in the industry and are backed by our solid reputation in the California housing market.
