Searching for California multifamily properties for sale for real estate investing? Look in these 10 cities!
Despite its unaffordability, California is still one of the best states to invest in real estate now and in the years to come. The Golden State not only provides huge capital growth for property investors, but it also has unique characteristics that make it appealing to anyone for owning real estate. Even after the wildfires, the California housing market 2019 still has good investment opportunities to offer – especially in the multifamily real estate sector.
If you’re wondering where exactly to invest in the California real estate market, keep reading this blog post as we list the best cities in California for buying multifamily properties for sale in 2019. But first, let’s break down a few reasons why you should invest in California real estate in the first place.
Why Invest in California Multifamily Properties for Sale
#1 Home Prices Are Going Up
The lack of affordable California homes for sale in 2018 will impact the 2019 housing market, as potential buyers are staying out of the market for longer. The median home price in The Golden State is $524,888, according to Zillow. This price is out of reach for many first-time home buyers – especially millennials – which is why they decide to rent.
New Census Bureau data shows that 55.2% of California households owned their own homes in the third quarter of 2018. While this is an increase from previous years, that share is still the 3rd worst level in the nation. Moreover, this tells you that almost half the population are renters, meaning the rental demand is strong in the California real estate market.
Furthermore, California home values have gone up 4.7% over the past year and Zillow predicts they will rise 7.3% within this year! These numbers tell us that California investment properties enjoy strong real estate appreciation rates. As a result, a property investor buying California multifamily properties for sale would profit from both rental yield and long-term appreciation.
For more information on what to expect from buying rental properties in California, read our California Housing Market Predictions 2019.
#2 Interest Rates Are Rising
This real estate trend is affecting not only the California housing market but the US housing market as a whole. Real estate experts, including the Mortgage Bankers Association and the California Association of Realtors (C.A.R), believe that interest rates will rise, which will cause a further decline in home sales. In fact, the average 30-year, fixed mortgage rate is expected to rise to 5.2%, up from 4.7% in 2018.
This is another reason why the 2019 California real estate market will see more residents looking to live in rental properties than those looking to buy and own their homes. Consequently, multifamily rental properties will have strong demand, thus allowing landlords or real estate investors to expect a good return on investment.
Looking for affordable multifamily properties for sale in California? Check out Mashvisor’s Property Finder. You can set the range for your budget and filter out any investment properties that are above/below your target price in the city of your choice.
#3 A Buyer’s Market for Investors
While The Golden State will continue to be among the most expensive in the US, 2019 is expected to be more of a buyer’s market for real estate investors. California homes for sale are expected to stay on the market longer due to their high prices. As a result, property investors have the ability to negotiate and get better deals than in 2018. Some experts even predict that sellers will lower their asking price to close deals. Zillow’s data supports this as it shows that while the median price of homes listed is $524,888, the median price of homes that sold is $488,400.
Related: The 2019 US Housing Market: A Seller’s Market or Buyer’s Market?
Where to Find Profitable Multifamily Properties for Sale in California
As promised, here are the top 10 cities in California where a real estate investor should look into for buying multifamily rental properties. Notice that these cities are much more affordable than major ones like San Francisco, Oakland, or Los Angeles. In addition, the potential rental yield from multifamily properties for sale in these cities is pretty high which allows for an excellent real estate return on investment. The following data is based on predictive analytics provided by Mashvisor’s Investment Property Calculator. To learn more about our product, click here.
Anaheim
- Median Property Price: $1,429,887
- Price Per Sq/Ft: $369
- Monthly Rental Income: $7,060
- Price-to-Rent-Ratio: 17
- Walk Score: 54
- Cash on Cash Return: 3%
Bakersfield
- Median Property Price: $1,001,060
- Price Per Sq/Ft: $382
- Monthly Rental Income: $7,025
- Price-to-Rent-Ratio: 12
- Walk Score: 37
- Cash on Cash Return: 3%
Related: Have You Heard? The Bakersfield Housing Market Is Hot for 2019
Barstow
- Median Property Price: $153,181
- Price Per Sq/Ft: $127
- Monthly Rental Income: $1,260
- Price-to-Rent-Ratio: 10
- Walk Score: 37
- Cash on Cash Return: 5%
Chico
- Median Property Price: $728,129
- Price Per Sq/Ft: $435
- Monthly Rental Income: $4,471
- Price-to-Rent-Ratio: 14
- Walk Score: 45
- Cash on Cash Return: 3%
Lake Isabella
- Median Property Price: $205,130
- Price Per Sq/Ft: $108
- Monthly Rental Income: $1,349
- Price-to-Rent-Ratio: 13
- Walk Score: 40
- Cash on Cash Return: 3%
Palm Springs
- Median Property Price: $1,117,000
- Price Per Sq/Ft: $373
- Monthly Rental Income: $4,529
- Price-to-Rent-Ratio: 21
- Walk Score: 35
- Cash on Cash Return: 3%
Related: Should You Invest in the Palm Springs Real Estate Market 2019?
Riverside
- Median Property Price: $747,059
- Price Per Sq/Ft: $301
- Monthly Rental Income: $4,175
- Price-to-Rent-Ratio: 15
- Walk Score: 41
- Cash on Cash Return: 3%
San Bernardino
- Median Property Price: $392,343
- Price Per Sq/Ft: $337
- Monthly Rental Income: $2,328
- Price-to-Rent-Ratio: 14
- Walk Score: 42
- Cash on Cash Return: 3%
Santa Ana
- Median Property Price: $1,345,603
- Price Per Sq/Ft: $649
- Monthly Rental Income: $7,264
- Price-to-Rent-Ratio: 15
- Walk Score: 66
- Cash on Cash Return: 3%
Twentynine Palms
- Median Property Price: $194,860
- Price Per Sq/Ft: $120
- Monthly Rental Income: $1,817
- Price-to-Rent-Ratio: 9
- Walk Score: 17
- Cash on Cash Return: 4%
To start looking for and analyzing the best California multifamily properties for sale in your city and neighborhood of choice, click here.
The Bottom Line
2019 is a good time to start investing in the California real estate market. The above trends and data show that owning a rental property in The Golden State have the potential to generate good returns in the years to come. Keep in mind, though, that location is not the only important factor affecting your success as a real estate investor. You also need to find lucrative multifamily properties for sale that promise you both positive cash flow and long-term return on investment. You can efficiently do this using Mashvisor’s advanced investment property search tools.
Start out your 14-day free trial with Mashvisor now and find the best California multifamily properties for sale that match your criteria and investment goals in a matter of minutes!