Santa Cruz, known for the beach, the boardwalk, Pacific Ave, hippies, and organic food, along with University of California Santa Cruz is also probably the best place for investors looking for rental properties right now. Here are some reasons why.
- 62% of Santa Cruz residents live in rentals, compared to a ntional average of 43%
- Average sale price of Santa Cruz homes has doubled in the last 5 years
- Cap rates for Santa Cruz rental properties are between 3.5-4% very easy to obtain, as opposed to 2.5-3% in The Silicon Valley
- No rent control but there is a one year moratorium on Santa Cruz short term rental permits so Air B&B investments not the way to go now.
- While the market is apprectiating the competition for investment homes in Santa Cruz is not as great as in Silicon Valley
- There are still Santa Cruz home sales contingent on the sale of another property, making 1031 exchanges much easier.
- Accepted offers almost always have contingnecies so you have time to figure out if the property makes sense for your portfolio.
- Would you rather visit your rental property in Santa Cruz or Milpitas? I would pick Santa Cruz any day.
- UCSC only guarentees housing for students for 2 years. They have over 18,000 students. The housing shortage is so acute that students are living 3 to a room or in their cars, not because they don't have the money for housing, but because there is such a shortage.
Smart Silicon Valley investors should look at Santa Cruz as a place where your money goes further and the cash flow is so much better.
I have put my money where my mouth is and own 3 Santa Cruz rental properties myself.
I encourage you to contact me if you have any questions about how and why to buy a rental property in Santa Cruz.
eXp Realty of California
Specializing in Probate, Trust, and Investment Properties