It is absolutely no secret that many real estate investors desire to find the best and most profitable location in the United States for their properties. It also comes as no surprise that the California real estate market has proven to be one of the most successful markets for real estate investing. However, California is quite big and so, there are many opportunities for investment. In order to give you specific and detailed information, we will review a specific city in the state- its capital- Sacramento. Yes, we will talk about Sacramento real estate. Let’s not lose any precious time and start by exploring the Sacramento real estate market. In addition, we will come to the conclusion of whether or not you should invest in Sacramento real estate in 2018. Shall we begin?
#1 The Sacramento Real Estate Market
Before discussing Sacramento real estate, we should first get to know the location itself. As previously mentioned, Sacramento is the capital of the US state of California. The city has around 501,334 inhabitants and is considered to be the fastest developing city in the state.
Sacramento real estate is actually one of the great opportunities in front of a real estate investor. According to Trulia, during the last year, home sales have increased by 8%. This is a significant value which represents the interest of investors in the market. Additionally, unlike many other California markets, Sacramento investment properties remain affordable. However, it is necessary to point out that the prices of Sacramento real estate investments are growing. The latter implies that even though the prices at the moment sound reasonable, this might not be the case in the upcoming months. This is one of the reasons why investing in Sacramento real estate is better to be done sooner rather than later.
Yet another thing worth mentioning is the increased demand for rentals on the market as well as the increased value Sacramento real estate investors charge for rent. In order to give you a better picture of the Sacramento real estate investing business, here are some of the metrics regarding the Sacramento housing market at this point of 2018.
Median Property Price: $370,263
Median Airbnb Rental Income: $864
Median Traditional Rental Income: $1,380
#2 Sacramento Real Estate: Traditional Rentals vs. Airbnb Sacramento
Even though investing in Sacramento real estate proves to be a profitable activity for house investors, it is important to observe which type of rental properties perform better in the Sacramento housing market. Curious to learn more about Airbnb rentals and traditional rentals? Make sure to read “What Can I Rent My House For? – Traditional and Airbnb Rentals.”
When it comes to rentals, Sacramento real estate investors have the opportunity to choose between short term and long term rentals. The reason behind this is simple- there is demand for each of the rental strategies. Traditional rentals attract tenants due to the fact that there are many job opportunities and a developing economy in the capital of California. Besides that, even though the rents are increasing, they are not growing as fast as the prices for Sacramento real estate properties. As you can imagine, many people seeking long term accommodation prefer to rent rather than buy in such cases. Nonetheless, data regarding Sacramento real estate reveals that currently, short term rentals are the better strategy in the city. That is why we will emphasize this type of Sacramento real estate investments.
Airbnb Sacramento attracts many tourists yearly due to its favorable climate throughout the whole year. This implies that there is no seasonality when it comes to Airbnb properties, which can only bring benefits to the Sacramento real estate investors. Being a great place for vacation rentals, the city also offers numerous engaging leisure activities. The latter acts as a magnet for domestic and international travelers. However, when investing in Sacramento real estate for short term rentals, you should consider the local rules and regulations which apply in the city and may vary between different Sacramento neighborhoods.
Speaking of Sacramento neighborhoods, let’s observe which the best neighborhoods in Sacramento are when it comes to investing in short term rentals.
#3 Sacramento Real Estate: Best Neighborhoods in Sacramento for Airbnb Rentals
When discussing Sacramento real estate, and more specifically Airbnb Sacramento, it is crucial to observe which the best places are for buying Sacramento investment properties. Here is the list of the top three neighborhoods for investing in Sacramento real estate properties to rent out on Airbnb. Interested to learn if you should invest in a vacation home in Sacramento? If the answer is yes, then make sure to read “Should I Buy a Vacation Home in Sacramento, CA?”
- Upper Land Park
Median Property Price: $446,700
Airbnb Rental Income: $2,773
Airbnb Cash on Cash Return: 3.54%
Airbnb Cap Rate: 3.54%
- North Oak Park
Median Property Price: $365,000
Airbnb Rental Income: $2,967
Airbnb Occupancy Rate: 68%
Airbnb Cash on Cash Return: 3.37%
Airbnb Cap Rate: 3.37%
- East Sacramento
Median Property Price: $605,950All Posts
Airbnb Rental Income: $3,184
Airbnb Occupancy Rate: 47.69%
Airbnb Cash on Cash Return: 2.29%
Airbnb Cap Rate: 2.29%
It is necessary to note that the values above have been acquired through Mashvisor’s investment property calculator. This tool will help you in conducting real estate market analysis as well as investment property analysis. It will show you all the real estate metrics you need within seconds. Further, the tool will provide you with detailed neighborhood and property information. Mashvisor’s investment property calculator will also suggest to you the optimal rental strategy for the selected investment. In other words, the tool is a great helper of every investor whether he/ she is considering investing in Sacramento real estate or not. Interested to learn more about this real estate investing tool? Make sure to read “Rental Property Calculator: The Must-Have Real Estate Investment Tool.”
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