New Investors Benefit From Residential Property Management In ...

New Investors Benefit From Residential Property Management In Southern California

Copyright (c) 2011 John V

New investors or those looking to develop a real estate portfolio to diversify their investments may find the current climate in Southern California very attractive. There are a number of reasons why the current market and the nature of investing in small properties, when leveraged with the help of expert residential property management in Southern California, is well suited for those new to real estate investing.

Several of the major cities in Southern California are ripe for residential investment. Home foreclosure rates in Southern California have been relatively high for a few years now, and are just starting to fall. At the same time, Standard & Poor?s Case-Shiller Home Price Index reports that residential property value in Los Angeles hit a bottom in June 2009, and after a rebound in May 2010 fell again, ending the year at 2003 levels. Coupled with the global economic recovery that is slowly gaining speed, this creates two forces that support a high return on investment in residential property.

First, it means that homes can be purchased for well below what their market value should be, below even the average value of comparable homes across the past decade. And because many of these homes are recently lived-in, they are in great shape and will not require significant upgrades to get them market ready. Second, foreclosures and dry credit mean more families will be looking for other paths to housing, such as rentals, leases, and rent to own, making it possible to get more rental value out of an investment residential property.

Another fact about residential properties, and specifically single-family homes, makes them a good entry investment. They tend to cost less than multifamily and commercial properties, if only because they are smaller. The tradeoff may be increased average management costs, but keeping upfront costs low is important for a new investor learning about real estate. This lower cost also makes it easier to get a loan for the purchase, and will keep payments down. This is especially important because sometimes it can take an investor a little longer to get the first investment property to market than it will take for future properties, if only because the investor has to find the right firm to provide residential property management in Southern California.

However, there are a number of frustrations and difficulties that can come with a residential rental property in Southern California, and these are just half the reason getting excellent residential property management is so important. For one thing, dealing with the legal, tax, and regulatory hurdles that govern rental ownership can be difficult without any experience. Whether this leads to filing inefficiencies that increase costs or slow down the process of getting the property to market, it will cut into profits. Second, dealing with tenants is both essential for success and requires a unique skill set all of its own. Lastly, with the economy still slightly depressed, minor property development can be relatively inexpensive and yield significant increases in rental and lease value as the economy recovers.

These are all decision and tasks best handled by expert residential property management in Southern California, as a skilled hand can take care of them quickly and cost-efficiently. So for investors looking to diversify their portfolios, residential property in Southern California may be a wise way to see investment capital grow, with the right help at least.

If you?re looking for assistance with residential property management in Southern California, Ruby Group Companies is a fantastic place to begin!

Source: http://eboden.org/?p=5999

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