Are you a real estate investor looking to expand your portfolio in the Auburn CA residential real estate market? If so, according to Forbes, there are some key considerations to take into account before you head out shopping for your next residential rental property. All seven of the tips they list in the article titled, Seven Secrets To Successful Single-Family Rental Real Estate Investing, are great overall advice. However, there are a few that particularly apply to our geographic region when Investing in Auburn CA Residential Rental Properties:
- “Know your sub-markets/neighborhoods.” Forbes warns that just because you hear of a big real estate trend in a city, don’t rush out and purchase investment property in that area. Know where you’re investing. And, when it comes down to it, Forbes reminds us that LOCATION, LOCATION, LOCATION is the biggest driving force in pricing real estate. What does this mean for Auburn CA investors? Know what neighborhoods are in demand. This is typically driven by school location, downtown areas, and big employers. Where are the desirables schools located? Who is the biggest employer in our community and how does their location proximity to neighborhoods effect demand in that area? There are pocket neighborhoods in Auburn that rent more quickly than others. These are the neighborhoods that an investor would want to plant their money in. Downtown areas are typically always more desirable due to location. However, a lot of the downtown homes are older, so either investing in a renovated downtown home or renovating it yourself would be key here. We are always happy to help in advising an Auburn CA investor of the highest $/sf areas in our community.
- “Learn about local regulations and federal laws.” This is great advice. And what Forbes forgot to touch on is the hugely booming trend of Airbnb vacation rentals. If you are thinking of investing in Auburn CA residential rentals specifically for vacation rental terms, ensure that the city or county do not have a ban on short term rentals. Most HOAs do (Auburn Valley Gold Club, Darkhorse, etc do not allow short term (less than 30 days) rentals. It really varies by city right now. City of Auburn only allows property owners to rent spaces in their home, and the home must be owner occupied. You cannot rent a stand along home or guest home by itself. Further north, Nevada City CA allows Airbnb rentals. Grass Valley is currently working on creating an ordinance for their City. It is looking like it may be similar to Auburn’s regulations. Investors are seeing that short term rental income is likely 2x’s greater than long term leases, but management fees are higher (20-25% of the gross rents is typical versus 7-10% for long term leases), as well as expenses (utilities are kept in owners names and paid by owner, additional expense would include cleaning cost and supplies for the vacation rental).
- “Build a relationship with a local handyman or contractor.” The last tip I’d like to elaborate on in relationship to Auburn CA geographic area is it’s who you know. This is one of the many reasons that residential real estate investors look to property management companies to handle their rentals. Quality companies will have vendor programs in place that not only offer a discount to that managment company for their services, but are also backed by proper insurance (both commercial liability and worker’s comp), licenses, and trained staff that knows how to interact with tenants. Working with quality vendors is one of the keys to a successful rental property.
Read the fully article by Forbes.com to see the four other key considerations when purchasing a residential real estate investment property. Great information. As always, Barrett Property Management, Inc. is happy to assist you with any investment needs. We are dedicated to investment property owner’s specific needs. We have licensed agents both in Nevada and Placer Counties (Meet our Team Here). We are currently in the process of opening an Auburn CA office location to better service our Placer County clients including Colfax, Applegate, Weimar, Meadow Vista, and Clipper Gap, Auburn, Looms, Newcastle and parts of Granite Bay and Roseville. We can be reached at 530.362.7072. Although all of our agents can assist you, our specific Placer County agent is Jessica Ornelas. She can be reached at Extension 105 or jessica@barrettpm.com.
Source: “Seven Secrets to Successful Single-Family Rental Real Estate Investing,” Forbes.com (Feb. 26, 2018)
