Investment property in Sacramento

[Deepak Arora]

Dear fellow BP members,

I am from bay area and have just started looking into REI recently. Ran the numbers quickly and realized that cash flow is extremely difficult in the bay for an average investor. Hence, started looking into Sacramento area and it seems like the real estate market there is pretty hot right now. I am mostly visiting the area over the weekend and wanted some opinion from the experts and locals.

I am currently looking in the Natomas neighborhood that was recommended by a friend.  There are also talks about Centene corporation west coast headquarters coming there soon that might bring in a lot of employment and hence, renters. 

- Any thoughts on if this would be a good place to start off with? 

- Any other areas worth taking a peek at in Sacramento? What are some of the most desirable neighborhoods in Sacramento?

- Any ideas on rent/price ratio in these areas? 

- Also heard about the new DRHorton constructed houses there that are going away very fast. Any thoughts on those?

Thanks a ton

DeEpAk

[Wes Blackwell]

@Deepak Arora

Yes, if you're coming from the Bay Area and want to stay in California, then Sacramento is a great place to look. If the price is too high, then consider Stockton as an alternative.

If neither work because of the numbers and prices being too high, I suggest Phoenix. Instead of a two hour drive it's a two hour flight, but median home price is down around $270k or so making it quite affordable.

For Sacramento Neighborhoods, here's where I would drive around for the nicer areas:

Tahoe Park
Northern Oak Park
Curtis Park
Land Park
Midtown / Downtown
East Sacramento
Fair Oaks
Carmichael
South Natomas

There's more to see, but that's a decent start to begin with. Some of those neighborhoods are priceier areas so that doesn't mean the number will work though.

Rent is going to vary by location, property type, and condition. But lots of people are moving from the Bay Area and everything looks like a steal comparatively so generally decent ROI.

If the numbers don't work, but you love the property and area, you'll just need to put more down. This particularly becomes an issue at the higher price ranges. ($450k+)