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Los Angeles

The coastal Southern California City of Los Angeles is better known by its initials, LA. With over 4 million residents, Los Angeles is the biggest city in California in regards to population and the second in the nation, after New York City. While the Los Angeles real estate market typically enjoys positive population growth, it doesn’t surpass the national growth rate. This can likely be attributed to the negative net migration that Los Angeles has been experiencing for the past 5 years.

 

It’s believed that a high cost of living and a lack of affordable housing in the Los Angeles housing market is the cause of the negative net migration. However, for a Los Angeles real estate investor who can afford to buy and own rental properties in the city, there is high rental demand. According to NeighborhoodScout, around 64% of LA residents are tenants, which means that buying a rental property in Los Angeles makes for a good real estate investment.

 

The economy is surprisingly not hindered by the slow population growth in Los Angeles. The job market continues to grow at a rate higher than the national. Even though Los Angeles is famous for being home to Hollywood and has been dubbed the Entertainment Capital of the World, its economy goes far beyond the entertainment industry. The city is actually part of the largest manufacturing center in the United States with over 300,000 manufacturing jobs in the Los Angeles-Glendale-Long Beach metro area. Other key industries in LA include banking and financing, healthcare, high-tech research and development, education, architecture, engineering, and both commercial and residential real estate construction.

 

The Los Angeles real estate market was named one of the Top 20 Markets to Watch in 2019 by the annual PWC real estate report. In the Pacific Region of the US, specifically, it comes in only second to Seattle in terms of overall real estate prospects.

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Los Angeles  Real Estate Investment Performance
Facts and Market Trends in Nashville
Homes For Sale
3,923
Airbnb Properties
6,613
Rental Properties
9,218
Traditional Vacancy rate
3.70%
Airbnb Occupancy Rate
58.91%
Mashmeter
77.47%
Median Price
$937,877
Median Rent Price
$3,297
Price/sqft
$533
Median Days on Market
54,432
Price to Rent Ratio
23.6
Average Cap Rate
Airbnb
0.71%
Traditional
1.29%
Average Rental Income
Airbnb
$3,202
Traditional
$3,315
 
Median Household Income
$54,432
Population
3,792,621
Transportation in Los Angeles
67 / 100
Somewhat Walkable
53 / 100
Good Transit
55 / 100
Bikeable
Los Angeles  Rent Prices
RENTAL STRATEGY STUDIOS 1 ROOM 2 ROOMS 3 ROOMS 4 ROOMS
Airbnb$1,765$1,844$2,510$3,359$4,903
Traditional$1,972$1,808$2,507$3,614$4,474
Los Angeles, CA - Homes for Sale - Newly Listed
$1,941,000
MLS 19442302
1210 BIENVENEDA Avenue
Los Angeles, CA 90272
Pacific Palisades
Single Family Residential
2 beds2 baths1,820 sq.ft.
CAP RATE
Trad. 1.56%Airbnb 0.03%
$839,000
MLS 19442904
13075 PACIFIC PROMENADE #102
Los Angeles, CA 90094
Playa Vista
Condo/Coop
2 beds2 baths995 sq.ft.
CAP RATE
Trad. 1.60%Airbnb -0.46%
$839,000
MLS 19442904
13075 PACIFIC PROMENADE #102
Los Angeles, CA 90094
Playa Vista
Condo/Coop
2 beds2 baths995 sq.ft.
CAP RATE
Trad. 1.60%Airbnb -0.46%
$535,000
MLS SR19058815
9853 Lassen Court
Los Angeles, CA 91345
Mission Hills
Single Family Residential
4 beds4 baths1,717 sq.ft.
CAP RATE
Trad. 3.46%Airbnb N/A
Top Performing Los Angeles Properties
$400,000
MLS SB19042329
5700 Etiwanda Avenue #185
Los Angeles, CA 91356
Tarzana
Condo/Coop
4 beds2 baths1,176 sq.ft.
CAP RATE
Trad. 6.03%Airbnb 15.26%
$147,900
MLS SR18188856
42 Canterbury Drive #42
Los Angeles, CA 91324
Northridge
Other
2 beds2 baths1,040 sq.ft.
CAP RATE
Trad. 7.35%Airbnb 11.85%
$575,000
MLS 19443166
5830 ETIWANDA Avenue #6
Los Angeles, CA 91356
Tarzana
Condo/Coop
4 beds4 baths2,263 sq.ft.
CAP RATE
Trad. 3.48%Airbnb 9.90%
$219,000
MLS SR19000202
15 York Street
Los Angeles, CA 91324
Northridge
Other
2 beds2 baths0 sq.ft.
CAP RATE
Trad. 4.38%Airbnb 7.17%
Recently Sold Homes in Los Angeles, CA
$3,495,000
MLS 18364544
6603 VISTA DEL MAR
Los Angeles, CA 90293
Playa Del Rey
Multi Family
9 beds7 baths5,984 sq.ft.
CAP RATE
Trad. N/AAirbnb N/A
$2,340,000
MLS 19442102
7927 West 4TH Street
Los Angeles, CA 90048
Mid City West
Multi Family
6 beds4 baths3,732 sq.ft.
CAP RATE
Trad. N/AAirbnb N/A
$2,340,000
MLS 19442102
7927 West 4TH Street
Los Angeles, CA 90048
Mid City West
Multi Family
6 beds4 baths3,732 sq.ft.
CAP RATE
Trad. N/AAirbnb N/A
$2,340,000
MLS 19442102
7927 West 4TH Street
Los Angeles, CA 90048
Mid City West
Multi Family
6 beds4 baths3,732 sq.ft.
CAP RATE
Trad. N/AAirbnb N/A
Property Value Changes and Real Estate Appreciation in the Los Angeles Housing Market

With the high real estate prices in Los Angeles, it’s natural to see that property appreciation has been significant over the years. According to NeighborhoodScout, Los Angeles properties have experienced a total appreciation of 200.8% since Q1 2000, which is an annual average rate of 6.1%. Typically, housing markets with such high property prices tend to show minimum appreciation once they hit peaks. However, Zillow reports that Los Angeles real estate values appreciated by 4.5% in 2018. So a property investor who can afford to buy an investment property in LA will still enjoy appreciation.

 

The Los Angeles housing market is currently a buyer’s market as there are more homes for sale on the market than people looking to buy. This is forcing property sellers to negotiate, which accounts for the fact that the median price of properties that sold is far below the median listing price. This fact, along with the property appreciation, makes the Los Angeles real estate market a great place to buy investment properties to rent out if you can afford the price tag.

Los Angeles, CA Top Multi Family Homes
$499,000
MLS RS19018843
1148 W 60th Place
Los Angeles, CA 90044
South Los Angeles
Multi Family
0 beds0 baths0 sq.ft.
CAP RATE
Trad. 5.25%Airbnb N/A
$759,957
MLS BB19012696
11437 Riverside Drive
Los Angeles, CA 91602
Valley Village
Multi Family
0 beds0 baths0 sq.ft.
CAP RATE
Trad. 3.73%Airbnb N/A
$650,000
MLS SB19015437
260 W 9th Street
Los Angeles, CA 90731
San Pedro
Multi Family
0 beds0 baths0 sq.ft.
CAP RATE
Trad. 3.39%Airbnb N/A
$399,999
MLS PW19052908
420 Camulos Street
Los Angeles, CA 90033
Boyle Heights
Multi Family
0 beds0 baths0 sq.ft.
CAP RATE
Trad. 3.35%Airbnb N/A
Homes Below Median Price in the Los Angeles, CA Real Estate Market
$400,000
MLS SB19042329
5700 Etiwanda Avenue #185
Los Angeles, CA 91356
Tarzana
Condo/Coop
4 beds2 baths1,176 sq.ft.
CAP RATE
Trad. 6.03%Airbnb 15.26%
$147,900
MLS SR18188856
42 Canterbury Drive #42
Los Angeles, CA 91324
Northridge
Other
2 beds2 baths1,040 sq.ft.
CAP RATE
Trad. 7.35%Airbnb 11.85%
$575,000
MLS 19443166
5830 ETIWANDA Avenue #6
Los Angeles, CA 91356
Tarzana
Condo/Coop
4 beds4 baths2,263 sq.ft.
CAP RATE
Trad. 3.48%Airbnb 9.90%
$219,000
MLS SR19000202
15 York Street
Los Angeles, CA 91324
Northridge
Other
2 beds2 baths0 sq.ft.
CAP RATE
Trad. 4.38%Airbnb 7.17%
Los Angeles Airbnb Growth and Regulations

Opponents of Airbnb in Los Angeles blame the lack of affordable housing and high real estate prices on the growth of the short-term rental industry. With Los Angeles County welcoming 2.7 million guests in 2018, generating $613 million in income for Airbnb Los Angeles hosts, the City Council set out to regulate these rental properties. As of July 2019, non-owner occupied short-term rental properties will be prohibited from being rented out on Airbnb and other vacation rental websites. This means that the operation of Airbnb investment properties is illegal in the Los Angeles real estate market.

 

For a primary residence to operate within the law, the host must live in the Airbnb rental property for half of the year. Short-term rentals will only be allowed to host guests for up to 120 days a year. Airbnb rentals will be subject to the same hotel accommodation taxes present in LA. Airbnb Los Angeles hosts must register with the city to operate legally at a cost of $89 a year and the rental property must meet all rental safety requirements. Properties under rent stabilization or ones that are considered affordable housing may not be listed for rent on Airbnb.

Los Angeles, CA Top Airbnb Homes
$139 per night
$144 per night
Entire home/apt · 1 bed
Bright Studio, Steps to the Beach!
578
$159 per night
$142 per night
Entire home/apt · 1 bed
BEST Downtown Loft on Airbnb!
564
Los Angeles, CA Homes for Rent
$2,945
MLS BB19059271
19945 Hatton Street
Los Angeles, CA
Winnetka
Single Family
3 beds2 baths1,347 sq.ft.
$3,200
MLS SR19058780
4933 FORMAN
Los Angeles, CA
Toluca Lake
Single Family
2 beds2 baths935 sq.ft.
$2,850
MLS SR19058423
5223 San Feliciano Drive
Los Angeles, CA
Woodland Hills
Single Family
2 beds1 baths842 sq.ft.
$2,075
MLS SR19058235
Los Angeles, CA Open Houses
Open 2 PM to 4 PM
$724,500
MLS BB19055941
1291 Montecito Drive
Los Angeles, CA 90031
Montecito Heights
Single Family Residential
3 beds2 baths1,370 sq.ft.
CAP RATE
Trad. 0.72%Airbnb 0.45%
Open 12 PM to 4 PM
$775,000
MLS OC19045918
3711 Grayburn Avenue
Los Angeles, CA 90018
Leimert Park
Single Family Residential
3 beds1 baths1,489 sq.ft.
CAP RATE
Trad. 0.54%Airbnb 1.63%
Open 2 PM to 4 PM
$524,500
MLS BB19044568
1820 Canyon Drive #102
Los Angeles, CA 90028
Hollywood
Condo/Coop
2 beds1 baths942 sq.ft.
CAP RATE
Trad. 1.06%Airbnb 1.95%
Open 12:30 PM to 3:30 PM
$375,000
MLS OC19016919
14650 Lassen Street #4
Los Angeles, CA 91345
Mission Hills
Condo/Coop
2 beds2 baths1,192 sq.ft.
CAP RATE
Trad. 1.32%Airbnb N/A
Best Los Angeles Neighborhoods for Buying Investment Property
39%
Mashmeter
property price
$1,130,000
Median
cap rate
3.51%
Traditional
3.35%
Airbnb
rental income
$3,309
Traditional
$3,153
Airbnb
homes for sale
72
occupancy rate
63%
Airbnb
67%
Mashmeter
property price
$739,000
Median
cap rate
7.40%
Traditional
5.06%
Airbnb
rental income
$4,560
Traditional
$3,116
Airbnb
homes for sale
73
occupancy rate
60%
Airbnb
62%
Mashmeter
property price
$1,022,500
Median
cap rate
6.92%
Traditional
4.31%
Airbnb
rental income
$5,900
Traditional
$3,674
Airbnb
homes for sale
42
occupancy rate
62%
Airbnb
38%
Mashmeter
property price
$2,299,000
Median
cap rate
4.03%
Traditional
2.61%
Airbnb
rental income
$7,722
Traditional
$4,999
Airbnb
homes for sale
67
occupancy rate
66%
Airbnb
75%
Mashmeter
property price
$2,374,000
Median
cap rate
3.08%
Traditional
2.07%
Airbnb
rental income
$6,087
Traditional
$4,103
Airbnb
homes for sale
40
occupancy rate
65%
Airbnb