5 Neighborhoods of LA That Will Give You the Highest Rental Yield in 2017
For many years in a row, Los Angeles has been building its reputation of a city where all dreams come true. Especially, if these dreams have something to do with money and fame. Given this, there’s no wonder that local rental market in today’s LA leaves much to be desired. Vacancy rates are ridiculously low (last year, LA was named the city with the fewest available rentals), real estate prices keep going up, and the entire city of angels seems to be running out of a room.
But it doesn’t mean the city is bad for landlords. Believe it or not, Los Angeles is considered a great spot for investing in rental properties. The second largest city in the country, LA boasts of great climate, stable job market, and exceptional diversity, so it comes as no surprise that people are flocking there no matter what.
There is one thing you need to understand. As long as a city is attractive for prospective tenants, it remains great for buying-to-let opportunities. But there’s a catch: cities as large as LA are composed of multiple neighborhoods and not all of them are equally good for the purpose. That’s why you need to make sure you’re investing in the right location.
In case you’re new to this business, you’re likely to think that most expensive zip codes like Beverly Hills, Santa Monica, or Venice Beach will give you the biggest rental yield. But property management business is a little bit more complicated, and in reality, things are far otherwise. In fact, investing in more affordable neighborhoods (at least some of them) can give you a bigger return on investment in a shorter period of time.
And we’re ready to tell you what those neighborhoods are. But first, let’s find out why so many people are flocking to LA every year.
“LA is a great place to live because of many factors. The cultural diversity of Los Angeles makes it unlike any city in America — not to mention the gorgeous year-round weather. While property prices might be higher in some areas, finding affordable housing is becoming easier in Los Angeles.”
Ramsey Abushahla, Real Estate Expert from RentSpree
“LA has everything. I meet people from all over the world that always say the same thing: they don’t have good weather, they don’t have beaches nearby, they have to drive for several hours to get access to theaters, clubs, outdoor activities. Many of these things are literally right next door for those who live here. We have access to everything.”
Chantay Bridges, Realtor from TruLine Realty
Now, as the perks of living in the city of angels are clear, let’s take it one step further and discover what neighborhoods are best for buying income property.
Median price for 1-bedroom rent: $2,800/mo
Median purchase price: $899,000
Growth rate: 17%
According to recent statistics, rental prices in Westwood are among the highest in the entire Los Angeles. At the same time, a median purchase price for properties in this area is only slightly higher than in Silver Lake or West LA. Given all this, it comes as no surprise why this neighborhood is so popular for rental property investments.
Median price for 1-bedroom rent: $1,950/mo
Median Purchase Price: $705,000
Growth rate: 30%
Another great spot for buying income property is considered the hippest neighborhood in the entire city. Statistics don’t lie, and it tells us that local real estate prices are trending upward. But so far, buying rental property in Silver Lake is still affordable, so grab your chance to invest in the neighborhood that will one day be one of the priciest in the city.
West Los Angeles
Median price for 1-bedroom rent: $1,800/mo
Median Purchase Price: $805,000
Growth rate: 18%
While most locals know that West LA is a neighborhood of almost limitless dining and shopping options, only a few realize that the area is also great for rental property investment. Given that only in the last year the median prices grew by 18 percent, there are grounds to assume that West LA will gain popularity in the years to come.
Median price for 1-bedroom rent: $1,795/mo
Median Purchase Price: $640,000
Growth rate: 2%
Some call this place immensely down to earth in a good sense, other say it’s the friendliest part of Los Angeles, and we’re telling you this neighborhood is worth your attention if you’re looking for the right place for rental property investments.
Median price for 1-bedroom rent: $1,780/mo
Median Purchase Price: $635,760
Growth rate: 12%
Here’s a fact number one: Los Feliz is a home to a majority of local artists, musicians, actors, and creative families. Here’s a fact number two: year by year, thousands of creative people are moving to LA in a hope to get famous. Now combine the two and you’ll realize why this neighborhood will always be popular among tenants. And as experience confirms over and over again, where are plenty of tenants, there are lower vacancy rates and higher rental yield. Do you really need any more proof that investing in Los Feliz is a good idea?
The center of American’s film and television industry, Los Angeles has all the potential of becoming your personal mecca of property management opportunities. Just like it’s hardly possible to imagine why people would stop dreaming about moving to LA, it’s impossible to argue that investments in local rental properties will pay off greatly. LA is for dreamers, go make your landlord’s dream come true.
Originally published at rentberry.com on April 11, 2017.