Buy rental property in Oakland or Sacramento

[Cheng Zhou]

Hi BiggerPockets members,

I am new to BiggerPockets, so I want to start out by saying hello! I am located in the Bay Area and thinking of buying my first investment rental property. I have a budget around 600k, and with this number, I found that Oakland and Sacramento are two possible candidates where I can acquire a property that is in decent condition.

So my question is:

What do folks think of both areas in terms of appreciation, cash flow, and safety? Based on these 3 criteria, would you recommend one area over the other?

I guess the answer will vary based on zip codes or a specific deal. Regardless, appreciate it if someone can share some insights, thanks!

Note:

1. I definitely don't want to invest in dangerous areas, which Oakland is notorious for. But I think there are still some safe areas there based on my initial research

2. Sacramento is a pretty big area, to give some concrete area examples: Elk Grove, Folsom, Roseville are some areas that I have looked at

[Brian Fitzgerald]

Hi Cheng, 

I have lived and am familiar with both Oakland and Sacramento. $600k is a healthy budget and in the bay area this will get you one property where in Sacramento you can get 2 or 3 and carry smaller mortgages depending on your strategy. 

Also Alameda County currently has an eviction moratorium in place and Oakland had a very strong Rental Board. In the greater Sacramento area we do not have either currently. There is a rental board and systems being built but no where near what Oakland has. 

Rental rates in Oakland will be higher and can continue to growth, in Sacramento you will receive smaller rents but the market is generally more stable and will generally also have appreciation in the long term. 

Should you find something in and would like a market rent analysis please feel free to reach out as I would be happy to do this for you for free.

Best regards,