Owning a rental property is one of the best ways to make a passive income. And in Southern California, an especially desirable place to live, there are a lot of opportunities to become a rental property owner. Southern California is known for its sunny weather, beaches, and beautiful views. The region offers a mix of city and suburbia and therefore has a diverse population with varying housing needs.
In this blog post, we’ll explore 6 reasons why you should become a rental property owner in Southern California.
1. Strong Demand for Rentals
Southern California is a popular destination for people wanting to settle down or get established in their careers. With millions of people calling this region home, there’s a constant demand for housing. If you’re looking for a region where your rental property won’t sit empty for long, Southern California is the place to be.
2. Higher Rent Rates in SoCal
A significant advantage of owning rental property in Southern California is the high rental rates. According to recent data, the average rent in LA is around $2,719. If you’re lucky enough to own a rental property in one of the affluent neighborhoods, you can charge even higher rents.
It’s worth noting that the cost of living in Southern California is higher than in other regions in the country. However, the high rental rates make it a worthwhile investment.
3. Favorable Tax Policies
The government in California offers a few tax breaks for rental property owners. One of them being the depreciation deductions. This approach lets you deduct the cost of acquiring an investment property over the years.
This deduction is applicable for properties that have a “useful life” of 27.5 years. This means you get to offset a percentage of your taxable income each year for almost three decades. This deduction makes owning property easier and more financially beneficial over the long term.
4. Strong Economy
Southern California is home to numerous companies and industries, such as technology, entertainment, and hospitality. With a robust economy, there’s no shortage of job opportunities. When people have jobs, there’s a need for housing, providing consistent demand for rental property owners.
5. Options for Investment
As mentioned earlier, Southern California is a diverse region. There are many distinct cities and towns, making it easier for investors to find their niche and cater to various demographics. The top cities where you can become a rental property owner include Westminster, Irvine, Long Beach, Santa Ana, and Anaheim.
Westminster, in particular, has many advantages like ample educational institutions, places of entertainment, and proximity to the beach, making it a popular place for families to call home.
However, it’s highly recommended to hire a Westminster property manager to handle all tenant and property management responsibilities. Having a reliable property manager means less stress for you and more time to enjoy the fruits of your investment.
6. Own Rental Property to Generate Passive Income
Owning rental property in Southern California is a smart investment due to its strong demand, high rental rates, favorable tax policies, robust economy, and options for investment. If you’re looking for an investment opportunity that promises steady income and long-term financial benefits, owning a rental property in Southern California is an excellent choice.
Remember to do your research and choose the right location for your rental property wisely. So, go forth and invest in the beauty of Southern California!