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Sherish K.
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Investment property in West Sacramento

Sherish K.
Posted Mar 29 2024, 17:53

Hello,

I recently purchased a newly constructed investment property in West Sacramento for over $600,000 near the Sacramento River. If anyone has experience investing in this area, I would appreciate some advice on the following:

1. Do you think I made the right decision in investing in West Sacramento?

2. Do you foresee potential growth in West Sacramento over the next 5 to 6 years?

3. What would be the estimated rent for a newly built 2,355 sqft home in that area?

Any insights or input would be greatly appreciated. Thank you!

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Scott Scoville
Pro Member
  • Real Estate Agent
  • Sacramento, CA
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Scott Scoville
Pro Member
  • Real Estate Agent
  • Sacramento, CA
Replied Mar 30 2024, 10:12
Quote from @Sherish K.:

Hello,

I recently purchased a newly constructed investment property in West Sacramento for over $600,000 near the Sacramento River. If anyone has experience investing in this area, I would appreciate some advice on the following:

1. Do you think I made the right decision in investing in West Sacramento?

2. Do you foresee potential growth in West Sacramento over the next 5 to 6 years?

3. What would be the estimated rent for a newly built 2,355 sqft home in that area?

Any insights or input would be greatly appreciated. Thank you!


Hey Sherish, inventory is low in West Sacramento, and their schools are really good compared to other parts of Sacramento. Rents depend on beds/baths, and most importantly location. However, in general, you should see rents somewhere in the $3k's, possibly as high as $4k if it's in a really good location. I'm an investor and agent in Sacramento, and available if you'd ever like to chat further.

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Noah Laker
  • Real Estate Broker
  • Sacramento, CA
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Noah Laker
  • Real Estate Broker
  • Sacramento, CA
Replied Mar 31 2024, 04:54
Quote from @Sherish K.:

Hello,

I recently purchased a newly constructed investment property in West Sacramento for over $600,000 near the Sacramento River. If anyone has experience investing in this area, I would appreciate some advice on the following:

1. Do you think I made the right decision in investing in West Sacramento?

2. Do you foresee potential growth in West Sacramento over the next 5 to 6 years?

3. What would be the estimated rent for a newly built 2,355 sqft home in that area?

Any insights or input would be greatly appreciated. Thank you!


 I’m a broker and property manager here in sac. I own a triplex in west sac and absolutely I would buy anything in West Sac right now, I only wish there were more inventory available. West Sac is developing rapidly, it’s only a stone’s throw from downtown Sac and there’s plenty of opportunity for infill and redevelopment. I anticipate massive growth in the area. 

I hope it was a good deal! Share some details! 

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Ben Howard
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  • Real Estate Agent
  • El Dorado Hills, CA
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Ben Howard
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  • Real Estate Agent
  • El Dorado Hills, CA
Replied Apr 2 2024, 10:31

Hello Sherish,

Congratulations on your newly constructed West Sacramento investment purchase.

1. West Sacramento really varies with several very different regions. Some would argue in support of a neighborhood in close proximity to downtown Sacramento such as the homes off of Lighthouse Dr, others would want to attract families with elementary school children who prefer homes in Bridgeway Lakes near Bridgeway Island Elementary School due to it's higher Great Schools rating vs. Elkhorn Village Elementary School. As an investor it may depend on your preferred avatar for a tenant and preferred age of home to purchase. As you said that you purchased a new home, that also guides your search. New home communities have lower cap ex due to their age/warranty and that may be what you are most comfortable with. Other investors such as many which I have represented prefer an established neighborhood where I can tell them how many, and which homes are owner occupied vs. not as a neighborhood with more owner occupied homes means less competition for rental homes. Likewise homes in established neighborhoods can have more owner equity and therefore less likely to have foreclosures in the event of a recession. Showing clients maps of estimated owner equity is useful for this purpose. Crime & Place shows more crime in the northern parts of West Sacramento vs. the southern parts, so an investor's tolerance for crime may influence their decision.

2. I suppose the response to your question depends on the question itself, are you asking about rent price growth, property appreciation growth, new development growth (competing inventory), etc.? Altos Research has both 95691 & 95605 zip codes as seller's markets trending slightly stronger to the seller's market side over the past few weeks. Homes in 95605 have seen more of a depreciation in median list price from end of September of 2023 to now with a $696,731 90 day average to $506,844 90 day average at the end of March 2024. For comparison, homes in 95691 appreciated in median list price from end of September of 2023 to now with a $636,112 90 day average to $649.037 90 day average at the end of March 2024.

3. I pulled up homes on Stetson Cir 95691 and a 5 bedroom 3 Bathroom 2,377 Sq Ft. home is quoted on Rentometer as $3,218/mo average with a +/-2% range on a 36 mo look back and 1 mile radius - the radius is important so as not to include Land Park homes across the river.

I also pulled up homes on Dutch Creek St and a 5 bedroom 3 bathroom 2,375sq ft home is quoted on Rentometer as $3,612 with a +/- 12% range (due to a lack of comps) on a 24 mo look back and a .75 mile radius.

An older home such as those on Silverwood Rd which were built in 2004 
as a 4 bedroom 3 bathroom 2,378sq ft home is quoted on Rentometer as
$3,014 with a +/- 2% range on a 24 mo look
back and a .75 mile radius.

So, the answers to your questions about West Sacramento reflect how answers would very just as they do in other parts of our region such as Folsom, Elk Grove, or Roseville. If you are investing for appreciation over a long period of time vs. cash flow now, and you are happy with your investment then all is good.

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Brian Fitzgerald
  • Property Manager
  • California Washington North Carolina South Carolina, Georgia and Alabama
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Brian Fitzgerald
  • Property Manager
  • California Washington North Carolina South Carolina, Georgia and Alabama
Replied Apr 3 2024, 09:22

Hello Sherish, 

West Sacramento has traditionally been a solid market. What type of asset did you construct? The rental market is ever shifting in region as we continue to transition out of the slower season. We are already seeing a reduction in the average days on market. If there is anything we can do to support you in the realm of property management please let me know. We do manage more than 2000 doors in the greater Sacramento region.

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Joe Bertolino
  • Investor
  • El Dorado Hills, CA
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Joe Bertolino
  • Investor
  • El Dorado Hills, CA
Replied Apr 3 2024, 15:16

I am pretty high on West Sac.  The new I street and Broadway bridges will connect to Downtown and values will continue to climb long term.  There are plans to improve both water fronts.