Orange County – and the entire Southern California coast – has been one of the most expensive regions of the country over the past several years. Renowned worldwide for its beautiful beaches, year-round sunshine and tourist attractions like Disneyland, Orange County is also well known for its high-paying jobs in the mortgage industry and other white-collar sectors of the economy. According to CBS Money Watch, Orange County is the ninth most-expensive market in the United States.
A region with such a large concentration of wealth has naturally driven up prices for real estate investment properties. As of the third quarter 2017, the median single-family rental (SFR) price in Orange County was $687,000, the third most expensive real estate investment market in the country, outpaced only by San Francisco with a median investment home price of $1 million, and San Jose with a median price of $823,000.
“Institutional investors once aggressively pursued assets in Orange County, but left several years ago in search of higher yields because the numbers simply don’t pencil out for major portfolio acquisitions. Private investors with leaner appetites than their institutional investor counterparts find it nearly impossible to compete with Orange County prices,” explains Steve Hovland, director of research for HomeUnion®.
So that’s where HomeUnion® steps in: We help investors located in Orange County – or anywhere in the world – compete in the heated real estate investment market. We can help you find affordable properties with reasonably-priced down payments and high returns using a wealth of big data, including a neighborhood ranking system unique to our company, and on-the-ground local market experts. The Neighborhood Investment Rating (NIR) evaluates over 120,000 neighborhoods nationwide based on a variety of economic, environmental, and demographical characteristics to help you quickly identify an investment market that meets your financial goals.
How to Get More Real Estate with Less Hassle
For Orange County residents who are considering investing in real estate, we suggest that you start by purchasing out-of-state to get more for your money. HomeUnion®’s Data Science department compared the cost of owning one single-family rental (SFR) in Orange County priced slightly above the median local price to a portfolio of three SFRs in other major U.S. metros. All of these metros, which happen to be located in the South, feature solid rental demand, stable population growth and substantial yields, key components to successful real estate investing.
The results of our study showed that an SFR buyer would need to initially fork over $214,720 for a _-rated home in the city of Orange, Calif. In Orange County. That investor would collect monthly rental payments of $2,738, with a total average annual return of 16.48% over 15 years. In comparison, an investor would only need about $152,000 down to acquire a portfolio of three cash-flowing assets in Atlanta, Raleigh-Durham, N.C. and Tampa. Monthly rent would also much higher – 70 percent higher – than the monthly rent for one Orange county property: $3,910 on average. The 15-year average return of 16.1% for these three properties is comparable to the Orange County investment.
“It’s important to note that the Orange County property is essentially non-cash flowing,” remarks Hovland, “making three properties a much better value, and a much better investment option.”
The HomeUnion® platform provides investors with access to fully managed SFR opportunities in markets with the highest potential to generate stable cash flow and long-term growth. Not only will we help you identify the best property or properties for your investment needs, we will manage the asset throughout the term of your ownership. Once you’ve identified a rental property in a market that’s right for your investment needs, you’ll never have to worry about the challenges of being a landlord. Our Asset Management team assumes all of those responsibilities, including fixing leaky plumbing, replacing a broken water heater, painting the walls or dealing with tenants who don’t pay their rent in a timely fashion.
For more information on investing in Orange County or Southern California rentals vs. portfolios of cash-flowing SFRs, schedule a consultation with one of our Solutions experts or contact us today at email@example.com.