This is a question for which I have to define the scope: Investments, even rental income, can include 1-4 units, multi-plexes, vacation rental, college housing, build-small=home-on-vacant-land (my favorite), plus others..
I’m defining it assuming a fixed income requirement, likely for a first-time investor.. So, will narrow it to 5-6% yield generating, low-maintenance 1-4 units.
Given the above self-constraint, The answer is actually not really that hard, you can start trying to answer on your own: Look at areas around you that HAVE NOT appreciated, maybe where properties stay on market for more than 2 open-house weekends? Well.. for San Diego, Los Angeles suburbs, SF Bay Area friends: Please don’t laugh.. I know you think none such pockets exist anywhere in California.. Not true, though in those areas you are unlikely to stumble upon one easily, if you work with a good Realtor (or advanced Redfin user), you will find opportunities.. But, as general guide, suggest gong 40-50 Miles away from any major metro/city, except Sacramento suburbs, and you will start seeing a steady stream of properties (Condos esp), that will start to look attractive; these need to be supported by a local job economy (blue or white collar), low-crime, low-litigation etc. BUT, I’ve seen pockets in Oakland, Hayward, San Jose, down to Universal City, La Jolla neighborhoods, that are fairly attractive…
I’m definitely going to put a plug here for a Real Estate agent, who knows local pockets well, as they themselves are on look out for personal investments, is good to team up with them, if they are in your social circle..
I know the above might sound too broad a guide, less of an enumerated list of areas/cities.. But, that’s intentional: a) To provide as a starting point for an in-depth conversation with me or with a Realtor, b) I truly believe there are opportunities everywhere, you can develop a skill to identify even with the areas you know..
I’m going to switch gears a little bit, focus on an International investor pitch, keeping in mind my summer of traveling to various pockets globally where there are opportunities. We will come back to California market and nuances of investments after a few global-focused blogs.
My next topic: Global Curiosity: How’s the Real Estate Market in India? China? Dubai?