Residential investment properties are becoming popular investments because they can provide stable yields over time, tax benefits, and the opportunity to generate rental income. Besides New York City, San Francisco, London, and Paris (all among the top five most popular regions), here are three other cities that make for savvy investments.
Why Los Angeles?
When one thinks of the cities in the United States that are at the top of their game as far as development and wealth, Los Angeles is a name that comes to mind. While there may be several reasons why it is so well off, one major reason is its real estate market. As more individuals continue to flock toward this Southern California city, the real estate market only continues to grow.
The demographics of Los Angeles are very diverse, which is what draws so many people toward it. While the median home price in Los Angeles is $638,000 (as of last year), there are numerous other cities that have a much higher rate. The reason why this isn’t an issue is that, while the median income for California is $60,190 (as of 2010), the average income for Los Angeles County is $56,337. This puts it at number two on the list of highest average incomes in the state of California. The poverty rate there is 19 percent which is just below San Francisco’s 19.9 percent.
The unemployment rate in Los Angeles is also much lower than the national average, which has helped drive up real estate prices. At 6.5 percent (as of July 2013), it’s well below the 9 percent nationwide average. The median housing price in America right now is $156,000; this means that affordability issues are not really an issue in the Los Angeles area.
This is one of the major reasons for its popularity; individuals who live on the East Coast and in the Midwest want to escape high housing costs and what better place than California? It’s also easy to get around, and both the San Francisco (to the north) and San Diego (to the south) metropolitan areas are only a quick flight away.
With Los Angeles expecting to add another million residents in the next 10 years, that will only continue to drive prices up even further. It’s already one of the most populous cities in America and its real estate market has thus far continued to thrive because there is no shortage in this expansion whatsoever. So while the rent and housing prices may be higher than some would like as of right now, there’s no doubt that it will only become more expensive in the future.
Besides, LA is home to STK – a must dining experience!
Why Miami?
The ebb and flow of Miami’s past few decades have led to a number of epic housing busts. But today, the market is on the upswing. And what better time to make an investment in South Florida real estate than right now?
Miami’s economy has become more diverse over time, making it less vulnerable to economic shifts than it once was. It is home to one of the top 10 ports in North America, and it’s a major producer of pharmaceuticals and medical devices. Tourism also continues to be a strong driver in the economy, bringing in almost $2 billion in local tax dollars annually. As this real estate market climbs out of recession, Miami looks to be one of the healthiest markets in the US.
The population is growing each year, bringing with it new development. The metropolitan area has grown to more than 2.7 million people. According to Miami realtor Neil Jenney, “Population growth has been one of the main determining factors of the strength of any real estate market.” And that population will have more money to spend as well. Census figures show that Miami’s median household income is rising, which means people are making more money now than they did two years ago. That also means that they have more disposable income to put into making their homes nicer, or purchasing larger properties.
In addition, according to the National Association of Realtors, people who have been waiting to sell their homes are doing so in greater numbers now. That means more inventory for buyers, which can help drive prices upward.
Plus, check out these artists you’ll only find in Florida.
Why Chicago?
Many cities in the United States are experiencing rapid growth, making real estate more attractive to buy and sell. The city of Chicago has many options for investment properties due to its economic growth, rising tourism industry, dynamic culture, and expanding IT industry. Additionally, rising property taxes may encourage homeowners to consider selling their primary homes and moving into a rental property in order to maintain their current lifestyle. Business owners and high-income earners may also be interested in buying investment properties if they plan on relocating or expanding their business into Chicago. Investors should consider the following when considering purchasing an investment property in the city of Chicago:
Chicago’s economy is thriving with opportunities in many different industries. The city claims five Fortune 500 company headquarters, including Boeing and Kraft Heinz, as well as nine private banks that manage over $40 billion in assets each. Several other high-paying jobs have been brought to the city due to its flourishing economy including top executive positions at large corporations, medical jobs, and service industry management.
People from all over the world visit Chicago because of its music scene, sporting events, and theater venues. Large-scale events such as Lollapalooza and the Air and Water Show bring in thousands of tourists each summer. The city also consistently ranks number one in the US for hosting the most conventions. There are several large hotels and businesses that cater to these events, creating more job opportunities for those looking to work in these growing industries.
Chicago has many universities such as Northwestern University and DePaul University as well as cultural institutions like the Art Institute of Chicago and Chicago Symphony Orchestra. Visitors and residents can enjoy a variety of sporting events, museums, nightclubs, restaurants, and the infamous “Bean” sculpture.
The Chicago Loop is home to many large technology companies including Motorola’s headquarters as well as many other growing start-ups. The city has been named one of the top destinations for tech startups in the country (source).
To wrap things up, if you look hard enough, you can find good reasons to invest in any region of the world. The most important thing is knowing why you’re investing, who you want to attract to your property, and how the investment is going to help you achieve your lifestyle or financial goals.
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