Los Angeles is definitely where dreams come true. Aside from aspiring comedy writers and theater hopefuls, L.A. is also where real estate investors are looking for their big break – or bust, depending on how they make it through the rough and tumble of L.A.’s rental property market.
With skyrocketing land values and vibrant lifestyle centers, L.A. is one of the best places for investing in a variety of rental housing, from multifamily assets to entire apartment blocks.
The world is yours so long as you know how to play it, so be sure to check out these tips before you enter the L.A. arena.
1. Know which areas are “hot”
According to The Jeff Tabor Group, in real estate investing, the biggest principle to keep in mind is knowing exactly where to invest. And while California is one of many states that are conducive for generating high returns, it’s still important to zero in on specific high-opportunity neighborhoods. The choice of location could make or break your rental property portfolio, so be sure to get ample advice from people who have experience investing in other major cities.
2. Conduct research
Of course, the location is just one of many preliminaries you will need to deal with before you get to the nitty-gritty of closing a rental property deal. Intensive research goes a long way as you look for the perfect asset to include in your L.A. portfolio. It helps if you can network with local investors and sit down with local chambers of commerce. Doing this allows you to get a good grasp of what’s happening on the ground so you can make the right decisions.
3. Understand local laws and ordinances
Much like any other city in the United States, L.A. has a special set of laws covering the acquisition of rental properties. It’s these laws that you need to bear in mind if you would like to operate a profitable investment portfolio. Part of your due diligence is to be familiar with laws covering rent control, tenant disputes, and fair housing that are covered under California statutes. At any rate, it would help a lot if you hire a lawyer to guide you through the legalities and avoid penalties in the long run.
4. Make it easy for residents
L.A. has a consistently high migration rate, which also means that there’s always a high demand for rental units. Having said that, the best way to compete for a larger share of the rental market is to purchase rental properties that already have value-added amenities. This helps you ensure that your net operating income remains high through the extra income you generate from amenities like coin-operated laundromats. You should also check for the availability of local movers who can help new tenants move into your rental units.
L.A. is definitely its own creature. Before buying into it, you need to understand it thoroughly to increase your chances of success in the rental property market. With these tips in mind, you will make it easier for yourself to acquire an income-generating asset that gives you the best results!