Top Tips When Buying Investment Property in Sacramento
Decided to buy property in Sacramento?
As the capital city of the State of California, the city has been ranked as one of the fastest growing areas in the region. But that’s not its only allure. It’s also known for its wide tree coverage, infrastructure, agriculture, and healthcare. Sacramento, California has a lot to offer its residents with aspects ranging from good schools, top notch health care facilities, and cultural as well as recreational areas.
Other than its vibrant feel and opportunities, Sacramento has a well-established and conducive real estate market. Whether you’re a first-time investor or an experienced investor, Sacramento is an area you should consider for your investments. Being one of the most desired states to both live and vacation in, housing in California is always in demand.
In this article, we here at
Peak Residential Property Management will go into the basics of buying an investment property in Sacramento, California. Follow these recommendations to maximize the potential of your rental property purchase!
What is the Sacramento, California Real Estate Market Like?
Sacramento is often overlooked as it doesn’t rank high in terms of population, area, or economy when compared to huge cities such as New York and San Francisco. However, the region’s real estate market is one that has been growing steadily and presents huge potential in terms of returns.
The Sacramento real estate market has been recording high appreciation rates over the years, yet the housing sector is still relatively affordable. In fact, it's at the top 10% of appreciation rates in the country! Potential Sacramento investors should take advantage of this opportunity while it lasts.
Top Tips for Real Estate Investments in Sacramento, California
Property investments can be both exciting and rewarding, especially if you make the right choice in purchasing your property. Below are some of the important tips that we think are not only beneficial but also very important when making that property purchase.
Tip #1: Understand the Real Estate Market of Sacramento
It’s important to carry out research on the area you are looking to buy in. Gather information on the market rates, the demographic composition, and understand the culture of the people. Such information will act as a guide in determining whether the investment will work for you as well as help you estimate the amount of rent to expect from your tenants.
When determining your suitable rental price, it’s essential to take into account all the associated taxes and other legal obligations that may apply to your property. This is because these amounts may seem little, but could add up to a huge amount of money in the long run. Remember the main aim of such an investment is profit, and you should therefore maximize on it.
The good thing is that you don’t have to do this alone. We here at Peak Residential Property Management can help you learn the market and understand your tenants’ needs as well as provide other property management services!
Tip #2: Know Your Preferred Neighborhood
Having had a look at the general Sacramental area and analyzed the market, it’s then important to determine the type of neighborhood you would like to invest in. The neighborhood you decide to invest in will likely determine the type of tenants your property will attract and the vacancy rate. The neighborhood also factors in amenities and the crime rate of the region, among other things. For amenities, it’s very important to know what amenities may be attractive to your target market.
Sacramento offers a balance between the urban lifestyle and the suburban escape. Just like any city, Sacramento has an electric mix of neighborhoods, all of which may have different appeals to different people.
Tip #3: Have a Budget in Mind
Know how much money you are willing to spend on the property. The data obtained from the Sacramental rental market will enable you to identify which neighborhood you can buy in. Make as many calculations as possible in order to determine the viability of a given investment. One forgotten addition by most new investors is closing costs, which are typically the responsibility of the buyer.
In your calculations, the general rule of thumb is that the inflow amount should be more than the outflow. Consider all forms of expenses that will be required to keep the property on its feet, be it repairs, taxes, marketing, or management. If in doubt, don’t hesitate to call upon the property experts like ourselves!
The investment should be in a position to sustain itself while at the same time bring in profits. Estimating the amount of rent you can expect may help make the decision on whether the investment is worth it or not.
Tip #4: Consider Hiring a Property Management Company
A property management company can help you avoid all the hassle that comes with being a property owner. They help lift the burden of management and let you enjoy your investment. As an investor, you also avoid making some of the common mistakes like getting in trouble with the law due to misunderstanding.
Peak Residential Property Management is the leading property management and consultant company in Sacramento. We offer a wide range of services to landlords, including investment consultancy, rental assessment, marketing, lease renewal, rent collection, tenant screening and accounting. Give us a call or reach us via our website to hear more about our services!
In a Nutshell: Real Estate Investing Tips in Sacramento, California
The Sacramento area is one with great potential, especially in the real estate sector. We’re positive that making an investment in the region will be a great choice. However, just like any other investment, it’s important to carry out your research and follow some guidelines in order to maximize returns.
Though not an exclusive list, we hope that the information above will be helpful to you as you make your decision. Contact us today and we can continue this conversation!
Peak Residential, Inc.
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