Real Estate Investment in Los Angeles, CA

Why Invest in Los Angeles Real Estate?

With the Hollywood sign perched at the entrance into the city, Los Angeles is definitely among the most widely recognized locations in the world. Its sunny weather, vibrant nightlife and the sheer amount of famous people draw in millions of visitors year round.

As desirable as always, Los Angeles is continuing to attract renters and homebuyers despite its overvalued real estate market. While more and more condos are being sold, it is expected that the growth of home prices will slow down during 2019.

Apart from the hospitality and film industries, LA has dozens of major industries such as aerospace, bioscience, information technology and gaming/animation sectors. The LA region’s key industries foster the growth of well-paying jobs and employ hundreds of thousands of workers. The Los Angeles city showcases consistently strong homebuyer activity and is a safe bet for real estate investment.

Investment Considerations for Los Angeles Real Estate

There are a number of factors to consider, including:

  • Strong and diverse economy – Not only does California have the largest GDP of any state in the US, but it has also been ranked the sixth largest world economy in 2017. Of course, as the state’s capital, Los Angeles profits from that kind of reputation. The globalization of the economy is bringing more and more companies into its metro area, with people following. During 2017, the total worth of the 10 most expensive housing units sold exceeded $500,000,000.
  • High demand for rental units – Although the median price of a home in Los Angeles is $795,000 and rising, the demand is high as well, at least when it comes to renting. As the city with the largest film industry in the whole of US, LA attracts a lot of new residents who are willing to pay high rent prices for a chance to succeed in Hollywood. Unfortunately, the supply is getting low, which means real estate investors need to tread carefully.
  • Population by foreign businessmen – Ever since the 2007 market correction, there has been a flood of wealthy foreign homebuyers in Los Angeles. This is mostly due to the city being perfectly located for trade and maintaining business relations, especially with Southeast Asia. This has made LA the safest market for investing in high-end real estate, but it has also made the prices go up for the rest of the population. To a real estate investor, this can be a double-edged sword depending on available resources.
  • Popularity as a destination – Los Angeles is one of the most famous cities in the world, with both domestic and international tourists flocking to it year round. During 2017 alone, almost 50 million visitors checked into hotels and other types of accommodation. The occupancy rate for Airbnb in the metro area is a whopping 71%. This all ensures a stable short-term rental income to anyone willing to invest in LA real estate.

What are the Best Neighborhoods to Invest in Los Angeles

As rent prices go up throughout the city, it might be a good time for real estate investors to consider any San Carlos neighborhood. Another reason for that is the 11.25% home appreciation that the area has experienced over the last decade.

When it comes to Los Angeles real estate, there is no stronger activity than the one in the luxury market. An increasing number of millionaires from all over the world are coming to Los Angeles to buy their secondary or even primary residence. In fact, only 13% of all purchases in 2016 were done by investors, which might show a lack of competition in this particular real estate market. Hottest Los Angeles neighborhoods for real estate includes Ladera Heights, Marina del Rey, Eagle Rock, Silver Lake/Echo Park, Glassell Park, Mid-City, Westchester, Downtown LA, Santa Monica and Atwater Village.

 

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