Why I still invest in Los Angeles...

Let's face it.. real estate in California is very expensive. Especially in areas that I personally invest in - Los Angeles, Malibu and Glendale. But to me investing in these areas is still a very attractive option for several reasons:

Strong and Diversified Economy: Los Angeles is home to a diverse range of industries, including entertainment, technology, aerospace, tourism, and international trade. This diversification helps to insulate the local economy from the negative effects of a downturn in any one industry.

High Demand for Housing: Los Angeles has a population of over 4 million people, and the demand for housing is consistently high. This can create opportunities for real estate investors, particularly in areas with a high demand for rental properties.

Strong Real Estate Market: The real estate market in Los Angeles is robust, with consistent appreciation in property values. This can make it an attractive market for investors seeking long-term capital growth.

High Rental Income Potential: The high demand for housing in Los Angeles can also result in high rental incomes for investors. The rental market is competitive, and rental rates tend to be high compared to other areas. The rental market is so competitive that for 10 years, I haven't had one day vacant. I start marketing vacancies 30 days prior to tenant leaving and hold open houses on weekends. This way by the time tenant vacates, my next tenant is already lined up. I even had tenants moving out and moving in on the same day!

Growing Population: While the rate of population growth has slowed somewhat in recent years during COVID, Los Angeles is still one of the largest and fastest-growing cities in the United States.There will always be people moving to LA as they're attracted to diverse range of job opportunities, desirable climate and lifestyle.This growth can help to support a strong real estate market and create new opportunities for investors.

Long story short Los Angeles can be an attractive market for real estate investors due to its strong and diversified economy, high demand for housing, strong real estate market, high rental income potential, and growing population. However, as with any investment, it's important to conduct thorough research and consider all factors before making a decision. I always say you can invest for cash flow or to build wealth. These are two different investment strategies. Investing for cash flow typically involves purchasing properties that generate rental income that exceeds the expenses associated with owning the property, such as mortgage payments, property taxes, insurance, and maintenance costs. The goal of this strategy is to generate regular income from the property, which can be used to cover expenses, reinvest in additional properties, or supplement your other income sources. On the other hand, building wealth through real estate investing typically involves purchasing properties with the goal of long-term appreciation. The idea is to buy properties in strong, established markets and have the potential to increase in value over time. Investing in smaller towns or out of state may have benefits of a cash flow but personally I enjoy stability of Los Angeles. Even with real estate prices decreasing all over the country, Los Angeles market remains strong. I still see bidding wars and properties being sold above asking price. Demand to buy as well as to rent is very strong.