LA Rentals Still Strong Investments
Great article from the Multi-housing news about LA's continued rise in apartment rents. Good news for prospective rental investors!
A short blurb from that article to whet your appetite:
"While the housing crisis is severely affecting the overall national and state economy, it is actually benefiting investors in apartment buildings in Southern California. Along with the influx of new residents, existing residents priced out of the Los Angeles market or who have experienced foreclosure are now renters again. Apartment building owners are seeing the Net Operating Incomes (NOI) of their properties increase as rental rates increase with demand. This has caused investors to continue to see LA as a safe investment choice for apartment buildings and investors should remain "on the hunt" for securing LA apartment properties in 2008 due to the expected continued upside in the market."
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Date: Friday, February, 1st 2008 @ 09:23:54 PMViews: 817
This blog entry currently has 3 comments posted.
DownLow
I think this market is too shaky to buy any real estate - at least not until we are closer to "the bottom". It feels there at least another 15% of correction left. Shouldn't we wait another 6 months to take advantage of further discounts? Even if it is rental.
Quinn
The key is that rental real estate, unlike owner occupied primary residences, is actually going up in value because rents are going up. Remember that valuations for rental real estate is based purely on rents - if rent goes up, the real estate value goes up. As long as LA rents stay strong (which is currently the case), the long term investment in rental property should still be solid. The way things are going right now, it looks like demand for rent can only go up because people can not get financing for housing. Lots of good rental property for sale throughout the perimeter of Downtown, especially along the Wilshire corridor that goes through Korea Town.
Quinn
Yes, I know the market is weak right now. But the rental market is not and as the market continues to erode, rental will only go up. If you are an investor, rather than buying a 2nd home, buy a duplex or 4-plex and enjoy the returns of being a landlord.