Have you been asking yourself "Should I buy investment real estate on the Central Coast?
Below are some tips from our Property Management Insiders on the Wine Country Team:
Real Estate continues to be in high demand across the United States. Investors are purchasing many of the available properties in our market. This creates profitable opportunities for themselves, with short and long-term rentals. One of the most lucrative markets in the U.S is right here in our own backyard - the Central Coast of California. San Luis Obispo County and Monterey County both make the list for top in-demand real estate markets.
Do you have questions or interest about investment opportunities specific to the central coast?
When it comes to Central Coast real estate, we are local market experts. There are many local and state regulations you should be aware of when it comes to owning rentals, and we can help you or find the right people to help you succeed in the long-term rental market.
The real estate market here on the Central Coast of California has been on an upswing for over a decade. Purchasing rental property as an investor can be a successful way to grow your real estate portfolio and make an income, but only if you’re partnering with the right team.
When investing in rental properties on the central coast of San Luis Obispo County, there are a few important items to always keep in mind. Here are our top items to consider:
Choosing a prospective rental property
2 homes on a 50+/- Acre Manuf. Home on 1.9+/- acres. 2 bed 2 bath home in
Templeton, Ca. $1,595,000 Atascadero, CA $630,000. Paso Robles, Ca $419,000
Investing in real estate is not for the faint of heart. Make sure you have both the financial ability and the patience before you start your search. Typically, there are real estate listings that would make good rentals. You are not the only investor who is searching for prospective home sales for rental property. Be prepared to compete with other investors, especially for the better homes (good location, good condition, etc). If you need to obtain a loan for your purchase, get pre-qualified before you start shopping. This enables you to be more knowledgeable about the mortgage rates and payment amount.
Be realistic – most properties are going to take work! Do you have the finances available to carry a vacant property for a month or longer while you prepare it for rent? If you can manage the carrying costs to fix up a home, you can sometimes negotiate a better purchase price on a property that needs some renovations. Buying at a lower price will also keep your property taxes lower. The chances of finding a new home that is move in ready are pretty slim due to the limited new construction in the communities of Paso Robles, Pismo Beach, Morro Bay, Avila Beach and other cities around the central coast.
When considering a rental property, details like square feet or amenities such as a swimming pool or a modern kitchen may not be as important in your search compared to when you are searching for your own primary residence. Keep in mind the overall idea is simplicity and profitability.
Once you have successfully purchased a property and prepared it for the rental market, it is important to have realistic and attainable goals. Research the local rental market – what are properties within the neighborhood renting for? Certain neighborhoods command higher prices than others. Are there are lot of vacant homes within the area?
Typically the coastal towns along the California Coast command a higher rent due to their proximity to the pacific ocean. Coastal homes are also more to purchase, especially if they have ocean views or are ocean-side parcels. Inland properties around Paso Robles and Atascadero are typically more affordable when compared to the coastal homes.
Choosing the right tenants for your rental property
Keeping your property occupied should be one of your highest priorities, especially in a high-turnover market like the Central Coast real estate market. It is of utmost importance to find a high quality, long term tenant.
How do you find such a tenant? Our biggest piece of advice would be to invest in a local, reputable, property manager. Property Managers are skilled at screening tenants, know what to look for, and can spot red flags that may require further reference checks. Property Managers are also required to have an active CA DRE Broker’s license, and must have a current knowledge of CA tenant laws. Since the market on the Central Coast is highly competitive, typically there are many applicants for each property. Make sure you’re choosing tenants that will make your life easier, not more stressful. Having a third party take over the responsibilities of advertising, screening tenants, showing your property, and creating the rental agreements allows you more time to focus on your own career or personal life.
Choosing the right Property Manager for your rental property
Ask your real estate agent. Often, your real estate agent will have a property manager they like to work with. They can provide you with names and contact information for local brokers who offer property management services. If the property was a rental, the listing agent might have the contact information for the current property manager. If the property appears to be well maintained, you might want to interview the current management company.
Search online. Look at local rental ads and see who others in your neighborhood are using. Are you impressed with their ads? Do the photos make the property look appealing? Are the properties in good condition?
Interview your top choices. Give them a call, ask questions. Are they friendly? Did they return your phone call? You want to work with someone who is going to respond to you in a timely manner. How many years of experience do they have?
A property manager works for you, which means they should adapt to your needs. Every investor has different needs. Sometimes a property manager just handles the screening and application process. Other times, they handle everything including yard maintenance, repairs, paying HOA’s, depositing owners monthly incomes, and more. The property manager team you choose should be reliable sources for you as well as your tenant.
Property owners need to know the laws
Every state has different laws when it comes to buying, selling, or renting real property. Every city or county may have additional laws on top of the state laws. Even some HOA’s (Homeowners Association) and CC&R’s (Covenants, Conditions and Restrictions) may have restrictions regarding rentals. While we highly recommend you should do your own research and ask the advice of your property management company, it also may be in your best interest to consult with a real estate attorney regarding your rights and tenants’ rights. You should have an understanding of what you are legally required to do as a property owner.
Some California real estate laws can be surprising and very specific. It’s well worth your time to consult an expert early on so you don’t face unanticipated legal fees down the line. Property Managers and real estate agents are not Real Estate Attorneys. Although typically knowledgeable, they are not experts in Real Estate law.
It is a wise choice to partner up with a local property management company that’s familiar with the local market and has experience operating in your specific area. Making this connection will help your business grow faster, keep your properties occupied, and bring higher returns on your investments. Investing in rental properties can be a successful business venture for the educated buyer creating passive income for years to come. However, it is important to do your homework and ask questions before taking the leap into the world of rental property owners.
A good property manager will comply with the principles of the fair housing act of 1968, equal opportunity act, as well as verify the accuracy of all information utilized when marketing your rental property (or properties).
About the Wine Country Team
We are a team of real estate agents who also offer property management and appraisal services located in Paso Robles, California. Although our office is located in Paso Robles, we list and sell properties throughout San Luis Obispo County and Southern Monterey County. We choose to manage properties throughout the communities of Paso Robles, Templeton, Atascadero, Heritage Ranch, and San Miguel. Our team primarily manages single family homes and single family homes on small acre parcels. Depending on the scenario, we do take on select ranch style, vineyard, commercial, and agricultural properties.
Our Appraisers complete various types of appraisal reports through Northern San Luis Obispo County and Southern Monterey County.
We represent buyers and sellers of single family homes, homes on land, as well as country retreats, larger ranches, agricultural land, and commercial properties. We advertise all of our listed properties in the Central Coast of California Regional Multiple Listing Service. Our team strives to make the entire process, from purchasing your rental property to managing your rental as simple as possible.
