Any other investment does not offer these advantages. These pros increase two times if you invest your money in buying a property in California. Real estates of California have high price rates but taking expert advice from experienced realtors helps you find profitable deals. Today we will share two pros of investing in real estate in California.
Advantages Of Investing In The Real Estate In California
California is called Golden state due to the field of golden poppies that bloom in spring throughout the state. This Golden State is famous for its property value in the real estate market, but for you, it will be the city of gold if you own a house there. Following are the benefits of investing in housing in California.
High Cash Flow
As the property in California is too expensive, this means there are chances of high cash flow. Until you own the property, you will get handsome money in the form of rent. The average rent of an average apartment in California is $1,409, even a studio apartment that is the most affordable one costs $1,309.
Only rental income is not the reason why investing in real estate in Northern or Southern California is beneficial, but the value of your house increases with each passing year.
Low Risk
According to the survey on Economy and Finance, real estate investment is the top pick of investors. 35% of Americans invest their money in real estate, 17% in savings accounts, 16% in gold, and 8% in bonds.
Real estate investment is the most reliable way of investment, and there is no fear of loss. Although the market fluctuates, the value never goes down, either remains stable or rates move up, so the property will never give you a failure.
California real estate market value is continuously rising, so if you buy a house this year after a few years, it will give you a considerable profit.
You can further decrease the chances of loss by hiring a trusted California mortgage broker who will provide you complete assistance and find the lender that best meets your requirement. They will also help you find a perfect home loan and in making the best deals.
High Economic Opportunities
California is the most populated state in the United States. Its cities are famous for their technological developments and so the opportunities of getting large flows of money are high.
Los Angeles is the city of Hollywood stars. This is the region where every actor wants to go. Bay Area and Silicon Valley are two fast-growing regions in California with diverse career opportunities in technology and many other cities with varied economic opportunities. Considering the chances of building a career in different fields, owning real estate in California is suitable for your future.
Tax Deduction
The other great advantage of owning real estate that most investors do not know is no tax deduction and no sales tax. In the case of real estate, your tax is deductible. The deductible items include mortgage interest and contributions (charity).
According to the Tax Cuts and Jobs Act, there are certain standard deductions, but you can also itemize the deduction. For the property of California, the standard deduction is better than itemize deduction.
Another tax advantage is depreciation which means you can depreciate the expenses of home maintenance. It offers a great advantage to real estate investors in California, where tax rates are very high.
Other tax deductions applied on real estate include pass-through deduction that is used on rental or passive income.
Tip For Investment In The Real Estate Market Of California
The tips for investing in the real estate market of California are as follows.
The Region With High Employment Opportunities
Select the cities with high employment opportunities. California has a strong economy and a higher level of employment. That's why most of the investors invest in this state. Depending on your passion, you can select the city, like if you develop your career in the entertainment world, then Los Angeles will be best for you.
Low Mortgage Rates
Most of the time, the mortgage interests in California remain high. The lowest mortgage rates are 3%, and the highest is 4%, so you can take advantage of low mortgage rates and purchase the Cali property when the rates are low.
Check The Market Trend
Before investing, check out the California housing market. Due to the pandemic California real estate market goes in the downtrend, but now it is going up. Compared to the previous year, 20% raises were observed in the CA housing market.
List Counties Of California And Their Average Real Estate Value
Here is the list of few counties of California with real estate prices, with LA being the lowest cost of the group:
• Los Angeles $809,865
• San Francisco $1,400,444
• San Mateo $1,460,503
• Marin $1,298,414
• Santa Clara $1,398,998
The Bottom Line For Investing In California Property
California is the state with the strong economy and so highest job opportunities. Most of the real estate investors worldwide invest their money to buy property in California due to the advantages it offers to realtors.
The price and rent of the real estate are too high for many property investors or homebuyers, even in most parts of La La Land and the Hollywood Hills. But once you buy your property, it will be the source of ongoing incredible income, and when you sell the property, it might give you an advantage of a million dollars.
