Investing in Sacramento

Investing in Sacramento

Sacramento offers a variety of investment options to a prospective Sacramento investor. Residential real estate housing ranges from low-income properties to multi-million dollar estates and is known to have had some of the best appreciation rates in the state. Sacramento has also seen marked advances in commercial real estate with the construction of new high-rise buildings, expansion of employment centers and increases in industrial activities. Sacramento attracts high tech manufacturers, Information Technology companies, biotech and medical research laboratories, and food processing industries.

The proximity of Sacramento to the San Francisco Bay Area, and the lower housing costs in the region have resulted in many people moving to Sacramento and commuting daily to offices in the Bay Area. The median home price in Sacramento is in stark contrast to the median price for a Bay Area home. While the Sacramento County’s median home price was 3,750, the SF Bay Area median price was 8,000 in April 2006.1 This big difference in the housing prices, together with the consistent growth of the Sacramento real estate market has attracted many investors to the County.

Investing in a real estate market like Sacramento becomes more lucrative because of the increasing housing prices. This price rise has two consequences for the investor.

1. The return on your investment can be phenomenal especially when you use leverage to your advantage. (Leverage is when you use more of borrowed money and less of your own to buy the property).
2. The increasing housing prices have made buying a home less affordable to many people, which can result in an increased demand for rental properties.

What can be music to the ears of investors is the fact that though the real estate prices are on the increase, the rates of interest on mortgages are still hovering near historic lows, making this your opportune time for investing in Sacramento.

For the real estate investor there are plenty of options for investing in Sacramento. If you are a first time homebuyer, you may consider investing in a duplex rather than a single family home. The advantage would be that the rental income from your tenant can be used to greatly reduce your monthly out-of-pocket mortgage expenses.

If you are a handy person and willing to work on a property, an excellent investment option may be a fixer upper. Fixer properties are usually sold at a discount to the market, and when fixed up, can be sold at full market price. You may also want to consider condos as a long-term, low risk investment option. Residential units like single-family homes, condominiums and residential income properties like Duplexes, Triplexes, and Fourplexes are good investment opportunities in Sacramento.

Whatever your choice of property in the Sacramento real estate market might be, ultimately it’s important to consult a reputable Sacramento real estate professional who can guide you through all the details and make your real estate purchase an enjoyable experience.

Source: Data Quick Information Systems

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