3 Good Reasons to Buy
a Rental Property in The Bay Area
Take Advantage of the Favorable
Rental Market in Silicon Valley
If you are contemplating buying a rental income property in Silicon Valley, now might be a good time to do so. Against all odds, over the course of the last 6 months, mortgage rates fell. In parallel, as housing prices flattened, the rental market is going from strength to strength in particular in the San Jose area. Finally, inventory is back up as more houses stay longer for sale on the market. Let us take a closer look at each factor below:
Affordable Mortgages Rates
Mortgage interest rates have come down during the last few months and the forecast is they are not going up any time soon. On June 19th, the Federal Reserve decided to hold the rates steady for the time being.
A Strong Rental Market
As of April 2019, average rent for an apartment in San Jose, CA is $3,064 which represents a 7.44% increase from last year when the average rent was $2836. One bedroom apartments in San Jose rent for $2,693 a month on average (a 7.43% increase from last year) and two bedroom apartment are rented for an average of $3,301 (+ 4.24% increase YoY). The most expensive San Jose neighborhoods to rent apartments are Downtown, North San Jose, Rose Garden and Almaden Valley while Cambrian Park, Edenvale and Evergreen are at the opposite end of the spectrum.
Housing Inventory is Up
There are plenty of homes for purchase in good rental areas. Most areas in Santa Clara County have shown an inventory surplus resulting from a wave of homes coming to the market (+55% from the same time last year). In this buyer’s market, there are more homes to choose at competitive prices and good chances to find a solid income-producing property.
How to Invest
Analyzing a real estate investment opportunity can be intimidating if you are new to the process. There many considerations such as location, appreciation, and maintenance as well as taxes, debt service and cash flow management, An investment opportunity always require a professional to “run the numbers.” before making any offer.
As a realtor, I have worked with many professional and individual investors in the Bay area and can help you find the most interesting rental property opportunities based on your own criteria.