Community Corner
Is It Time to Buy Rental Property in Culver City?
With rents at an even plateau for the last year, should buyers be looking at rental property?
In 2007 the average price for an investment property—two to four units—was approximately $952,000 ($443.00 per square foot); today the average sold price is $781,000 ($272.00 per square foot). This represents an 18 percent drop in price since 2007, but a 39 percent drop in price per square foot. In other words, investment property buyers are buying much more living/rental space for their money today than they were in 2007.
Given the fact that rents have not dropped at all in the last four years—and that interest rates are at all-time lows—those investors with the desire and wherewithal to purchase rental property have an opportune time.
So why are we seeing these dynamics playing out at time when the economy and real estate in particular are experiencing such challenging times?
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A couple of key reasons spring to mind:
- Schools: , particularly the elementary schools, have continued to improve their API , and the reputation is out there for everyone to see. Therefore, the demand for rental property, from the renter’s side of the equation, is extremely high. People who can't quite afford to buy in Culver City want to rent in order to guarantee their kids can attend the schools.
- No Rent Control: From the owners/landlords perspective, not having to deal with rent control (such as in the City of Los Angeles where, once a tenant moves in, a rent rate is established and can only be increased by an amount and frequency that is set by the city), is a very motivating factor for investors who want to see a return on their money and have control over their own destiny.
This is a very powerful combination, as borne out by the amount of time an investment property takes to sell in today's market. In 2007 when real estate was "hot," the average time to sell a two- to four-unit building in Culver City was 52 days, today it's 59, almost no change. With the stock market representing a high risk, buying income property in Culver City is a sound investment.
