Real Estate Investment in Santa Clara, CA

Why Invest in Santa Clara, CA Real Estate?

Santa Clara is a city located next to San Jose, right in California's Silicon Valley. With bustling shopping centers, thriving businesses, tree-lined neighborhoods, awesome tourist attractions, and a world-class swim center, Santa Clara draws plenty of people every year. As a result, the city's population growth rate was 0.33% in 2017. Often referred to as 'the center of what's possible', the area attracts potential renters, active homebuyers, and tourists, which makes it one of the most in-demand markets in the country for real estate investors.

Synonymous with Silicon Valley, Santa Clara has a continuously-growing and solid economy that's well-grounded in Information Technology and manufacturing. Therefore, multiple tech companies and manufacturing firms are headquartered here. This ensures an ongoing interest by tenants, hence the rental demand for investors is robust and continuous.

Investment Considerations for Santa Clara Real Estate

There are a number of factors to consider, including:

  • Strong Job Market Growth- Intel Corporation, NVIDIA, Applied Materials, Oracle, and Agilent Technologies are just some of the knowledge-based companies that have their headquarters in Santa Clara. Furthermore, the city is a startup mecca, where entrepreneurs from all over the country and world relocate. Consequently, in 2017, the area's job market grew by 3.2% (with 18,200 new jobs created), thus powered to robust gains. While the growth was mainly fueled by the tech industry, this is also bolstering non-tech sectors. Moreover, the unemployment rate is currently 2.8%, lower than the 5.2% US average. Real estate investors in rental single-family properties can consider this a great benefit, as they have the chance to get high returns on their investments.
  • The growing population numbers indicate many newly-arrived people in search for a place to live. Besides the stable economy, Santa Clara is home to some highly-appreciated tertiary educational institutions like Santa Clara University and Mission College; hence, there's a consistent rental demand among current students and recent grads. And while the median property price is rather on the expensive side ($1,305,052), the average rental income is $3,585, the cap rate is 0.75%, and the cash on cash return is 0.75%. Therefore, real estate investors can enjoy a steady stream of year-round income.
  • Tech Hub - There are numerous tech companies in Santa Clara; Avaya, Palo Alto Networks, Sophos, and Marvell Semiconductor are a just handful of them. Taking this into account, it comes as no surprise that the city is one of the major tech hubs worldwide. This encourages skilled professionals and business owners to move to the area. For real estate investors, this translates into easily finding renters and buyers for their properties.
  • Popular Tourist Destination - As the city's tourism industry is stronger than ever, Santa Clara is an ideal place for real estate investors to own vacation rental properties. During the past years, there was a 6.2% increase in visitor spending, which equals to $5.40 billion. Tourists are interested in renowned attractions like California's Great America, Intel Museum, Mission Santa Clara de Asís, Rosicrucian Egyptian Museum, Municipal Rose Garden, Santa Clara Central Park, and Ulistac Natural Area. The average rental income on short-term rental properties is $4,872 and the cash on cash return & cap rate are 1.27% each. This means that investing in such properties can generate good profits for real estate investors.

What are the best neighborhoods to invest in Santa Clara

  • Even if it's a pricey market, Santa Clara has a broad range of opportunities for real estate investors in single-family homes and vacation rental properties. The entire city is nice for real estate investing. However, areas like El Camino Real, Pomeroy Avenue, and Bowers Avenue are particularly sought-after, thanks to their high safety rankings and convenient locations.

 

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