I'm interested in purchasing my first rental property. Ideally, I would like to start with a duplex, triplex or fourplex in the $200K to $300K range with an emphasis on cash flow. As Greater LA is priced out, I've been exploring lower cost areas like Bakersfield and Victorville. I'm curious if anyone has any pros or cons between the two areas, or if there are other areas I should be considering. Also, if anyone has insights into particular parts of Bakersfield or Victorville I should target, I would really appreciate the advice.
You can easily find 2-4 units that in Bakersfield in that price range that cash flow well. There's a strong rental economy here so investors profit well from buying multi-unit properties here. In that price range, I'd focus on Oildale (North Bakersfield), Northeast, and Downtown. All of these areas have (mostly) decent quality neighborhoods with a high amount of tenant density. At the higher end of that price range you may be able to find some duplexes in the higher end areas of town, Northwest and Southwest. I would avoid South of Brundage and East of 99 freeway, and in general the far outskirts of town, as these tend to be low density rental areas with higher vacancy rates.
Thanks, Max. I really appreciate the insights. I see some some solid looking multi-unit properties in Oildale. Is airplane noise a concern? The neighborhood appears to backup against the Meadows Field Airport. I wasn't sure if noise or pollution from the planes would discourage renters.
Hi @John Minnix
Congrats on finding BP! Its a great community!
In my opinion, the Victorville market could be good, however, we are seeing that on average you will have a lower sales price versus monthly rent number in Bakersfield. That means that you will be able to purchase a home for less money in Bakersfield, CA but should still be able to attain about the same rents.
Also, Bakersfield is set to almost triple its population in the coming years because of the HSR, oil, agriculture, and now the transportation community. Tejon Ranch is bringing a lot of transportation jobs to the area, along with the surrounding outskirts of Bakersfield increasing in their transportation jobs as well.
Therefore, I would select Bakersfield of the two.
Now in Bakersfield, looking at multi-family, you can see that price per unit has gone up significantly in the recent past because we have multiple investors, such as yourself, that are coming into the area because they are being priced out of LA, Bay Area, etc. However, there are still good cash flowing properties that can be found.
For example, we are closing on a property which is in a solid B neighborhood, right next to major retail tenants, and mid-high priced homes (for Bakersfield area). This property is in need of some repair from the previous owner deferred maintenance, but still cash flows today. If that property has all of the deferred maintenance taken care of then it will cash flow even better, providing a solid return.
I hope this was helpful, and would love to discuss further with you!
Feel free to PM me.
@John Minnix sorry I didn't answer the second response that you had...
There are definitely solid properties in Oildale. The biggest concern here would be the quality of tenant and you have to be highly selective of the streets which you pick because some streets and pockets of Oildale can be really bad. The airport does have some good pockets next to it, and if you are interested in looking further I would be happy to help you search!