BAKERSFIELD, Calif. (KGET) — The real estate market has been on a hot streak lately, especially in Kern County.
With a reported 11.5 percent population growth rate from 2010 to 2020, Kern County was ranked as the 12th fastest growing county in California.
Bakersfield real estate investment advisor Joseph Leon said there are a few things to look out for.
“What it boils down to is location, location, location,” Leon said. “After that, it’s supply and demand.”
A good location and a high demand is the safest route, but will give the lowest return on investment.
“Real estate is not a fixed deal,” Leon said.
Where putting money into a bank usually gives a 4.5 – 5 percent fixed return, an income property may give a 6 percent return based on the rent price, Leon said. The market may either flip making the property worth less or it may go well.
“Let’s say inflation hits real estate and you gain 10 percent in one year,” Leon said. “That’s a lot more than [the original] 6 percent.” The equity in the property is higher on paper meaning owners can sell for more, he said.
Inversely, for buyers who are looking for a house to live in, the return becomes the properties’ livability: How close to work it is, whether it’s in a safe, desirable neighborhood with good schools, etc.
But, he said homebuyers should also factor in what the outlook on the house could be in the following years.
Get educated about your market
Leon said the most important thing to do when investing in real estate is to become knowledgable about the market you’re looking at.
“Let’s say the oil industry comes to a stop,” Leon said. “Do you know how many homes in Bakersfield are leased and mortgaged by oil-related people?”
Also check things like water supply, Leon said. Without ready access to clean, drinkable water, there is no…
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