Tonight, there will be thousands and thousands of people from all over the globe going out in Los Angeles – dining, shopping, touring, or partying. As you know, Los Angeles is one of the top cities visited by international and national tourists in the United States. Known for being the film capital of the world, it is a hub for tourists and professionals.
Though, there have been some ups and downs for the city when it comes to Los Angeles real estate investing in the past decade. So, we decided to analyze the current opportunities for real estate investing in Los Angeles, for both traditional and Airbnb; and we’ve found that investing in Los Angeles now would be a profitable opportunity. We gladly outline four reasons for you below.
1) Tourists, tourists, tourists…
Well we’ve already said it, but Los Angeles receives a lot of tourists – more than 10 million a year, with a median age of 36 and a median income of $90,580. Peak season is in the spring and late summer. There’s currently a large disparity between lodging supply and demand. According to the Los Angeles Times, in April 2014, the National Cable and Telecommunications Association had to outsource some rooms for its annual conference attendees and send them to hotels in Century City, more than 11 miles to the west, due to the lack of available rooms nearby.
There’s clearly a need for more available spaces, so why not enter Airbnb? You can turn your property into a rental space for the numerous visitors. In a city with lots of travelers, and not enough hotels, Airbnb opportunities become more profitable. So, we highly encourage you to consider Airbnb for Los Angeles real estate investing. To give you some idea on where to invest in Los Angeles exactly, consider these neighborhoods.
Neighborhoods with Highest Average Airbnb Rental Income:
- Westchester: $5,844/mo
- Mid City West: $4,653/mo
- Los Feliz: $3,743/mo
Neighborhoods with Highest Airbnb Occupancy Rate:
- Highland Park: 80%
- Mount Washington: 79.7%
- Silver Lake: 75%.
Related: Best Cities For Airbnb Occupancy Rates
2) L.A. is a business city now . . .
The perception of the city is changing. In addition to being a touristy site, it is also a business hub. With new creative office spaces and amenities that are attracting entertainment and high tech tenants, Los Angeles is turning into a business site, bringing more residents into the city. Domestic and internationals in multiple fields are moving in for better work opportunities. As more professionals are moving into Los Angeles, the need for more residential areas increases.
When it comes to Los Angeles real estate investing, consider traditional investing because more people are moving to the area yet the city has one of the lowest homeownership rates. Why, you might ask? Because the professionals moving in are mostly young, single individuals looking to rent apartments and houses, rather than buying homes. The rental income increases, and the area appreciates well, giving you both short-term and long-term benefits. Take a look at some of the most profitable areas.
Neighborhoods with Highest Average Traditional Rental Income:
- Venice: $4,946/mo
- Mar Vista: $4,682/mo
- Silver Lake: $3,925/mo
3) More money!
Good news for the economy! Economists consider Los Angeles a full employment city. Los Angeles regained the 300,000 jobs it lost during the recession plus another 100,000. It is also expected to cut down its unemployment rate from 7% to 5.6% by 2017. Naturally, increasing wages are expected to follow. Per Capita income is predicted to increase from 3.9% this year to 4.9% in 2017. In addition to the booming entertainment industry that constantly uplifts the city’s economy, the healthcare sector, information, education, exporting of goods, and construction, are improving the overall economy of the whole state of California.
As the unemployment rates are continuously being cut down and wages are expected to increase, poverty rates are predicted to decline. This is good news for Los Angeles real estate investing and for you too —residents will now be more likely to afford the increasing rental prices.
4) Start now!
We hope this blog is getting you excited about Los Angeles real estate investing but do be careful, Los Angeles is running out of room! The population has seen an enormous growth, but the city’s space is not getting any bigger. This will directly affect the home prices. Property prices, as you surely know, are already well above the national average. The median home price is currently about $580,000 but prices are expected to dramatically increase in the next few years. Our data still shows that you are able to highly profit from jumping into Los Angeles real estate investing, both traditional and Airbnb. But, don’t wait if you plan on investing. Start now!
Related: 5 Risks That Come With a Rental Property and How to Mitigate Them
You can begin by searching for traditional and Airbnb investment properties in Los Angeles on Mashvisor.