Recap Bakersfield Multifamily Market in 2019
Thinking About Real Estate Investing In Bakersfield, California?
Real Estate investing has been the hot topic for investors over the past few years. We have seen new market highs in almost all major markets, and there are many locations that have, plain and simple, priced people out of the market. With prices increasing, and Investors still needing to place their funds, there are many new locations that are being looked at throughout the United States for real estate investment.
The Midwest and the South have come up quite a bit over the last few years, as far as real estate investment is concerned, but a problem that a lot of investors are having is that they may not live in the areas, may not be familiar with these areas, and they do not have their teams in these areas so they are having some problems investing in these areas and getting good deals.
Why Should I Leave California For Real Estate Investing?
As stated above, there are many markets that are outperforming and seeing great returns, but there can be a lot of caveats with that. For example, a California investor would have difficulty with a property in Ohio because they don’t have the connections or team set up there, and it causes many different problems which will eventually eat at the returns. In the mean time, these investors are missing what is, in my opinion, a huge real estate investing opportunity right in their own backyard where if they do have a problem they can come and see the property, send their own guys to take care of it, or even come and take care of it themselves.
I Thought Bakersfield California Was The Armpit of California!
Although there has been historically a negative connotation with Bakersfield, the real estate investing market has generally been good to investors. Looking back at the 2019 numbers for apartment real estate in Bakersfield, we can see that there are many promising factors for Investors.
New Rental Unit Inventory
Multifamily development in Bakersfield has been historically lacking due to the immense amount of land, and peoples willingness and wanting to stay in their own homes, but as we see with the shifting demographics, owning a property may not be what a lot of people want, and investors are cashing in on that. Just this year, in the Bakersfield real estate market we saw that there are approximately 190 new units that have come online which means we now have around 23,258 apartment rental units in Bakersfield.
Bakersfield Vacancy Rate
In the recent past, Bakersfield has seen very low vacancy rates. Sometimes even down below the 2% mark, which means that rents will generally increase and that is a good sign for real estate investors. Over 2019 we saw that the average vacancy rate was around 4.5% and that remains close to unchanged year over year. If compared with the vacancy rate around the United States, you will see that it is below the average by close to 2.5%.
Bakersfield Asking Rent/Unit
Real Estate Investors are always looking for ways to increase their rents, and because of the low vacancy and the new influx of renters from other parts of California, we are seeing an increase in the rents asked per unit. The average rents asked for a unit are around $969/month which is a 4% increase from the previous year, and given that the average of Bakersfield is much lower than the surrounding areas, we believe there is good rental growth opportunity over time as the area continues to grow and develop.
We have done many deals, and continue to do many deals that return our Clients a net return of 6%, 8% or even double digits on their real estate. If you are interested in real estate investing in Bakersfield, feel free to reach out to Synergy Real Estate and Property Management.
We provide our real estate investing clients a one-stop shop service where you can be sure that you are buying a quality investment property, and having that property managed in order to preserve your initial investment capital.
Until Next Time,