san francisco real estate

Investing In Real Estate in San Francisco? Why You Should Avoid This Mistake

 
San Francisco is a great place to live in as most people living here will tell you. But it is not a good place to invest in real estate! It never has been, as I explain categorically to people who come to me for advice. In fact in this short episode I explain why it has never really been a good real estate investment destination, for several reasons.

Think about rental incomes relative to property value.

Property prices in the SF area have appreciated over the decades. However, this is not the only criterion for wise real estate investments. Rental income is an important factor as well. Now it is true that rents are fairly high in San Francisco if we speak in absolute terms. However, the rent is not high relative to the value of the property here. (In this short video I explain and illustrate with some numbers. In order for your real estate investment to make sense, your rental income has to be commensurate with the value of the property you buy. Otherwise it doesn’t make sense for you as an investor.

Keep local laws in mind.

Another thing to keep in mind is state laws and rental regulations. California laws tend to be fairly anti-landlord. In my experience, a recalcitrant tenant who doesn’t pay and also refuses to vacate can turn into a very big headache for a long time. This is another reason it doesn’t make sense to invest in real estate in San Francisco. In this regard, the Sun Belt states are a lot more investment friendly.
In this short video I explain how one of our investors recently closed a very favorable property deal. You too can learn how to make savvy real estate investments to secure your financial future! Check out upcoming events to learn more about creating retirement riches for you and your family.