Where Can an Investor Find Profitable Rental Properties in the Bay Area?

Here’s another good question we received in our mailbag.

Q: Where can an investor find opportunities for rental properties in the Bay Area?

The best investment opportunities for the average investor, with limited experience, lie in small rental properties that can be bought on a break even cash flow basis. Over time, as equity is built through a combination of principle pay down and appreciation, your cash flow improves and the property becomes more valuable. Look for inexpensive housing that you can buy with financing that allows you to get at least a break even cash flow. Small rental properties held for the long term have for many people been profitable, easy to manage and an excellent retirement vehicle.

It is almost impossible to do that on the mid-peninsula. In the South Bay, you can buy homes for under $300,000, which gets you to a number that may lend a break even cash flow. At this time, South Santa Clara County offers some excellent buys. In the Central Valley (Sacramento to Fresno) there are many more opportunities to buy homes at a break even cash flow.

Thanks for your questions and keep them coming!

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