In times of economic uncertainty it can be challenging to determine what to do with your investment portfolio. Whether that means real estate, the stock market, or even alternative investments it can prove difficult to determine which actions will help you to not only weather the storm, but prosper.
COVID-19 has resulted in some challenges nationwide for real estate (particularly markets like San Francisco and New York); however, in our local market we are seeing a different story for single family home rentals.
Increased Demand for Rentals
In the local Long Beach and Lakewood markets we are seeing a large increase in inquiries and applications as soon as a property is listed as available. It is possible to get double-digit applications for homes in the most desirable neighborhoods that are priced right. Even though COVID-19 has caused some uncertainty in certain sectors we are seeing strong buyers with excellent applications.
With this increase in demand for rentals in Long Beach, rising rents, and even strong appreciation we invite you to consider your options to make the most out of your investment.
Sell Your Rental (or even your Long Beach Home)
In
2019 Zillow’s data
showed a 6.9% increase in value with a forecasted 5.81% appreciation for 2020. With these types of gains, and historically low interest rates that have attracted a large buying pool, now may be the time to sell your Long Beach rental or even your home.
If you are a rental property owner and you have a potential large gain you might even consider doing a 1031 exchange to defer your taxable gains. This method could allow you to move up an asset class (say going from a duplex to a 4-unit or even larger) to capitalize on the strong rental demand and appreciation of the Long Beach real estate market.
Expand Your Home with an Accessory Dwelling Unit (ADU) and/or Jr. ADU
The
California Legislature
has made it much easier to add an
accessory dwelling unit
to a single family residence. This has commonly been referred to as a “mother-in-law unit” and depending on the city you can add a unit to your property >800 sq ft in size. With rents remaining strong you can effectively turn your single family home into a duplex or if you also consider adding a Jr. ADU you are effectively developing a triplex.
When it comes to deciding on if you should sell your rental, expand your home to include an ADU or even just remain as you are there are many items to consider. To help you understand your options you to call us today at (562) 888-0247 and let us know you’d just like to discuss what’s possible. Or if you prefer a complete evaluation of your property we invite you to fill out our Free Rental Analysis and we can perform additional diligence to help you with your decision.
