Why do people Buy Property in California
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
Why do people Buy Property in California
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
1yWhere do you think people are growing richer with real estate.....Los Angeles or Cleveland? Owning just a few typical properties in California turns you into a multimillionaire very quickly. Owning a few typical properties in Cleveland gets you an extra $500 a month.
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- 1yHenry ClarkPro MemberDeveloper · Member since 2020 · 4k+ posts · 4k+ votes
Quote from @James Wise:
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Allen Maris:
It always seems the people that don't live in CA or have ever lived in CA are always the one leading the bandwagon of "why would anyone live in CA?". I say that about many many parts of our country as well. It goes both ways.
Of course someone who doesn't live in California would be one to say this. If we wanted to live in California we could. We choose not to.
Many people cannot afford to live in the coastal Ca cities. I have a friend that moved from San Diego CA to Michigan in the late 1990s. He has indicated he wants to move back to San Diego but the cost would affect his quality of life. He bought in Michigan when he moved there, but the property value is far lower than a similar purchase in San Diego would have achieved. He probably could not buy a starter home for the value of his Michigan property that is fairly nice (on a pond and far nicer than a starter home in San Diego).
There is a reason more people choose to live in CA than any other state and it is not even that close. However, informing others of all the reasons would be contrary to my desire to not encourage people to move to CA.
so CA $ucks. There is no reason anyone should move to CA.
Best wishes
I'm guessing that at this very moment in time you don't have to worry about a ton of people trying to move there.
I like nasty. If I wasn’t investing elsewhere and in my buy box. I would be buying as many burnt lots as possible. Insurance and fires wouldn’t matter. Can handle those. Although it is at the expense of a bad situation, it would be helping most of the sellers. Once in a lifetime event.
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Allen Maris:
It always seems the people that don't live in CA or have ever lived in CA are always the one leading the bandwagon of "why would anyone live in CA?". I say that about many many parts of our country as well. It goes both ways.
Of course someone who doesn't live in California would be one to say this. If we wanted to live in California we could. We choose not to.
Many people cannot afford to live in the coastal Ca cities. I have a friend that moved from San Diego CA to Michigan in the late 1990s. He has indicated he wants to move back to San Diego but the cost would affect his quality of life. He bought in Michigan when he moved there, but the property value is far lower than a similar purchase in San Diego would have achieved. He probably could not buy a starter home for the value of his Michigan property that is fairly nice (on a pond and far nicer than a starter home in San Diego).
There is a reason more people choose to live in CA than any other state and it is not even that close. However, informing others of all the reasons would be contrary to my desire to not encourage people to move to CA.
so CA $ucks. There is no reason anyone should move to CA.
Best wishes
very common when folks move from the high dollar areas of CA to low dollar areas of the US moving back is virtually impossbile as so many rely on their equity of their current home to fund a new purchase. It works the opposite those in high dollar areas of CA that lived there say 20 years and did not keep refinancing now have massive equity and they move and create a nicer housing situation for themselves Oregon prime example.. Quote from @James Wise:
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Allen Maris:
It always seems the people that don't live in CA or have ever lived in CA are always the one leading the bandwagon of "why would anyone live in CA?". I say that about many many parts of our country as well. It goes both ways.
Of course someone who doesn't live in California would be one to say this. If we wanted to live in California we could. We choose not to.
Many people cannot afford to live in the coastal Ca cities. I have a friend that moved from San Diego CA to Michigan in the late 1990s. He has indicated he wants to move back to San Diego but the cost would affect his quality of life. He bought in Michigan when he moved there, but the property value is far lower than a similar purchase in San Diego would have achieved. He probably could not buy a starter home for the value of his Michigan property that is fairly nice (on a pond and far nicer than a starter home in San Diego).
There is a reason more people choose to live in CA than any other state and it is not even that close. However, informing others of all the reasons would be contrary to my desire to not encourage people to move to CA.
so CA $ucks. There is no reason anyone should move to CA.
Best wishes
I'm guessing that at this very moment in time you don't have to worry about a ton of people trying to move there.
Unfortunately James I am not convinced you are correct. We have had many large fires before. Yet the large coastal CA cities still have a housing shortage. I typically get multiple applications at my first open house charging top of market price. The rents are crazy. A few years ago core logic indicated the average rent increase for the year in this city for a SFH was $600/month. I had some increases higher than this average and I keep my good/best tenants a bit below market rent.
if no one came to San Diego, it would still take years to have enough housing. The Los Angeles fires are likely to make a poor situation worse. Some will leave the state, but many will be in search of housing in state that does not exist. If I lived in and worked in Los Angeles and lost my home, I would first look in Los Angeles, then Orange County, then San Diego, then Santa Barbara. None of those areas have enough housing.
i was forecasting a moderate year in terms of rent increase of $100/month average. I suspect that is unlikely with the increased need for housing. If I had an empty unit today, I think it would rent for at least $200/month more than a month ago. I suspect this will increase as the people who lost homes do not want to live in hotels and, as the high season approaches, the hotels will be less inclined to provide reduced rates to the fire victims.
I hope no one from out of state decides to move to San Diego until this housing situation is stabilized.
i wish all the fire victims the best and success finding replacement housing.- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Allen Maris:
It always seems the people that don't live in CA or have ever lived in CA are always the one leading the bandwagon of "why would anyone live in CA?". I say that about many many parts of our country as well. It goes both ways.
Of course someone who doesn't live in California would be one to say this. If we wanted to live in California we could. We choose not to.
Many people cannot afford to live in the coastal Ca cities. I have a friend that moved from San Diego CA to Michigan in the late 1990s. He has indicated he wants to move back to San Diego but the cost would affect his quality of life. He bought in Michigan when he moved there, but the property value is far lower than a similar purchase in San Diego would have achieved. He probably could not buy a starter home for the value of his Michigan property that is fairly nice (on a pond and far nicer than a starter home in San Diego).
There is a reason more people choose to live in CA than any other state and it is not even that close. However, informing others of all the reasons would be contrary to my desire to not encourage people to move to CA.
so CA $ucks. There is no reason anyone should move to CA.
Best wishes
I'm guessing that at this very moment in time you don't have to worry about a ton of people trying to move there.
Unfortunately James I am not convinced you are correct. We have had many large fires before. Yet the large coastal CA cities still have a housing shortage. I typically get multiple applications at my first open house charging top of market price. The rents are crazy. A few years ago core logic indicated the average rent increase for the year in this city for a SFH was $600/month. I had some increases higher than this average and I keep my good/best tenants a bit below market rent.
if no one came to San Diego, it would still take years to have enough housing. The Los Angeles fires are likely to make a poor situation worse. Some will leave the state, but many will be in search of housing in state that does not exist. If I lived in and worked in Los Angeles and lost my home, I would first look in Los Angeles, then Orange County, then San Diego, then Santa Barbara. None of those areas have enough housing.
i was forecasting a moderate year in terms of rent increase of $100/month average. I suspect that is unlikely with the increased need for housing. If I had an empty unit today, I think it would rent for at least $200/month more than a month ago. I suspect this will increase as the people who lost homes do not want to live in hotels and, as the high season approaches, the hotels will be less inclined to provide reduced rates to the fire victims.
I hope no one from out of state decides to move to San Diego until this housing situation is stabilized.
i wish all the fire victims the best and success finding replacement housing.
maybe now the land boom that was predicted in the 20s for palmdale / lancaster and CA city will start to see migration .. we know there are 500k vacant lots in the high desert just north of LA.. Quote from @Jay Hinrichs:
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Allen Maris:
It always seems the people that don't live in CA or have ever lived in CA are always the one leading the bandwagon of "why would anyone live in CA?". I say that about many many parts of our country as well. It goes both ways.
Of course someone who doesn't live in California would be one to say this. If we wanted to live in California we could. We choose not to.
Many people cannot afford to live in the coastal Ca cities. I have a friend that moved from San Diego CA to Michigan in the late 1990s. He has indicated he wants to move back to San Diego but the cost would affect his quality of life. He bought in Michigan when he moved there, but the property value is far lower than a similar purchase in San Diego would have achieved. He probably could not buy a starter home for the value of his Michigan property that is fairly nice (on a pond and far nicer than a starter home in San Diego).
There is a reason more people choose to live in CA than any other state and it is not even that close. However, informing others of all the reasons would be contrary to my desire to not encourage people to move to CA.
so CA $ucks. There is no reason anyone should move to CA.
Best wishes
I'm guessing that at this very moment in time you don't have to worry about a ton of people trying to move there.
Unfortunately James I am not convinced you are correct. We have had many large fires before. Yet the large coastal CA cities still have a housing shortage. I typically get multiple applications at my first open house charging top of market price. The rents are crazy. A few years ago core logic indicated the average rent increase for the year in this city for a SFH was $600/month. I had some increases higher than this average and I keep my good/best tenants a bit below market rent.
if no one came to San Diego, it would still take years to have enough housing. The Los Angeles fires are likely to make a poor situation worse. Some will leave the state, but many will be in search of housing in state that does not exist. If I lived in and worked in Los Angeles and lost my home, I would first look in Los Angeles, then Orange County, then San Diego, then Santa Barbara. None of those areas have enough housing.
i was forecasting a moderate year in terms of rent increase of $100/month average. I suspect that is unlikely with the increased need for housing. If I had an empty unit today, I think it would rent for at least $200/month more than a month ago. I suspect this will increase as the people who lost homes do not want to live in hotels and, as the high season approaches, the hotels will be less inclined to provide reduced rates to the fire victims.
I hope no one from out of state decides to move to San Diego until this housing situation is stabilized.
i wish all the fire victims the best and success finding replacement housing.
maybe now the land boom that was predicted in the 20s for palmdale / lancaster and CA city will start to see migration .. we know there are 500k vacant lots in the high desert just north of LA..I do not see many pacific palisades owners being thrilled at high desert. Maybe some of the other fire areas (such at Altadena) will like the high desert.
For those in pacific palisades, they are used to nice homes in nice locations. I suspect a very large percentage of them will desire to stay coastal.
Of course their options may be limited as there is not enough housing. Some of those owners are very wealthy and can afford to pay above current market price, but the inventory is not that big.
a lot of speculation. Time will enlighten to the realities but I see no scenario where coastal Southern CA does not have a significant housing shortage. So anyone from OOS that considered moving to coastal Southern Ca, please hold off until things settle down. no need to make a bad situation worse.Best wishes to all but especially the fire victims.
Quote from @Nicholas L.:
one thing that has been interesting to me is that even as CA's overall growth has slowed / stopped, RE prices have remained high. so there is still a tremendous, tremendous demand component even without the same population growth.
thoughts on this?
I think the "population decline" is falsely reported and exaggerated by certain media outlets that have a political agenda against CA. There were only a few years of population loss during covid and it was minimal, more like flat than a decline and probably covid-related because immigration wasn't really happening as much during covid. Then in 2023 the population began growing again by around 75,000 people, and last year 2024 that number was 233,000 net population gain which is second only to TX, and more than double AZ at 109,000. So the raw numbers and the sensational headlines about an "exodus from CA" seem to contradict each other.
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Dan H.:
Quote from @Jay Hinrichs:
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Allen Maris:
It always seems the people that don't live in CA or have ever lived in CA are always the one leading the bandwagon of "why would anyone live in CA?". I say that about many many parts of our country as well. It goes both ways.
Of course someone who doesn't live in California would be one to say this. If we wanted to live in California we could. We choose not to.
Many people cannot afford to live in the coastal Ca cities. I have a friend that moved from San Diego CA to Michigan in the late 1990s. He has indicated he wants to move back to San Diego but the cost would affect his quality of life. He bought in Michigan when he moved there, but the property value is far lower than a similar purchase in San Diego would have achieved. He probably could not buy a starter home for the value of his Michigan property that is fairly nice (on a pond and far nicer than a starter home in San Diego).
There is a reason more people choose to live in CA than any other state and it is not even that close. However, informing others of all the reasons would be contrary to my desire to not encourage people to move to CA.
so CA $ucks. There is no reason anyone should move to CA.
Best wishes
I'm guessing that at this very moment in time you don't have to worry about a ton of people trying to move there.
Unfortunately James I am not convinced you are correct. We have had many large fires before. Yet the large coastal CA cities still have a housing shortage. I typically get multiple applications at my first open house charging top of market price. The rents are crazy. A few years ago core logic indicated the average rent increase for the year in this city for a SFH was $600/month. I had some increases higher than this average and I keep my good/best tenants a bit below market rent.
if no one came to San Diego, it would still take years to have enough housing. The Los Angeles fires are likely to make a poor situation worse. Some will leave the state, but many will be in search of housing in state that does not exist. If I lived in and worked in Los Angeles and lost my home, I would first look in Los Angeles, then Orange County, then San Diego, then Santa Barbara. None of those areas have enough housing.
i was forecasting a moderate year in terms of rent increase of $100/month average. I suspect that is unlikely with the increased need for housing. If I had an empty unit today, I think it would rent for at least $200/month more than a month ago. I suspect this will increase as the people who lost homes do not want to live in hotels and, as the high season approaches, the hotels will be less inclined to provide reduced rates to the fire victims.
I hope no one from out of state decides to move to San Diego until this housing situation is stabilized.
i wish all the fire victims the best and success finding replacement housing.
maybe now the land boom that was predicted in the 20s for palmdale / lancaster and CA city will start to see migration .. we know there are 500k vacant lots in the high desert just north of LA..I do not see many pacific palisades owners being thrilled at high desert. Maybe some of the other fire areas (such at Altadena) will like the high desert.
For those in pacific palisades, they are used to nice homes in nice locations. I suspect a very large percentage of them will desire to stay coastal.
Of course their options may be limited as there is not enough housing. Some of those owners are very wealthy and can afford to pay above current market price, but the inventory is not that big.
a lot of speculation. Time will enlighten to the realities but I see no scenario where coastal Southern CA does not have a significant housing shortage. So anyone from OOS that considered moving to coastal Southern Ca, please hold off until things settle down. no need to make a bad situation worse.Best wishes to all but especially the fire victims.
I was being factious with the suggestion that PP folks would run up to the high desert they are more likely to go out to La quinta and one of the many private clubs there which will have housing to their standards .. - 1yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
totally agree. my point was that we won't see continued population growth going forward like we did from 1990-2020, and even in the absence of that growth, housing demand will remain strong.
LA county lost several hundred thousand residents from 2020-2024. did that cause the price of housing to go down? it seems not to have.
Quote from @Nicholas L.:
totally agree. my point was that we won't see continued population growth going forward like we did from 1990-2020, and even in the absence of that growth, housing demand will remain strong.
LA county lost several hundred thousand residents from 2020-2024. did that cause the price of housing to go down? it seems not to have.
Looking at LA county specifically: I just checked quickly and it looks like you are correct about the population there being down by ~3.8% from 2020-2024 (which is about 450,000 people, however there are still 9.6M people there and it is still the most populated county not only in CA but also the entire US). 450,000 is a lot less people. But when I google "why are housing prices still rising in LA despite population declining", all of the answers start by explaining the imbalance of supply and demand. "Limited supply due to tough zoning and restrictive permitting process, high construction costs, and expensive dirt, and population increases (guess AI hasn't gotten the memo that population has actually decreased)". We know supply is a big issue with low inventory across the whole country. But with that many less people in LA county now than 2020, you'd expect the decrease in demand would be enough to correct the supply/demand imbalance locally... So, good question...
Perhaps supply and demand were so out of whack before 2020 that 450,000 less people still isn't enough to create a balanced market? Foreign investment? A demographic shift with more wealthy people buying there? Record-breaking high prices in the upper end of the market skewing the entire market upward? Perhaps many of the people leaving have held on to their property and rented them out instead of selling? The lock-in effect of the period from 2016-2022 when interest rates were super low, causing owners with those low rates to not want to sell? Prop 13? More detached single family homes changing hands than attached leading to higher average sales? Prices adjusting for inflation? The fact that LA county has a high number of investor-owned properties? A combination of the above factors?
I really don't know the market there well enough to guess the definitive answer but I know when I break down the data in my own market, I see a wide variation in price trends in the individual price bands. For example the "entry-level" price point almost always has high demand and trends up, whereas luxury is much more volatile and just a few sales in the very upper end of the market can skew the overall averages upward or downward drastically month to month. So I think in order to pin this down we'd have to have someone intimately familiar with the various factors at play weigh in, especially demographics and market trends in the individual price points. Maybe more lower-income people are moving out due to affordability, while wealthier people are moving in/ foreign investors are buying things up, driving prices up? I would think foreign investment would be a big factor for both LA and San Francisco at least, which could keep prices high despite losing population.
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Steve K.:
Quote from @Nicholas L.:
totally agree. my point was that we won't see continued population growth going forward like we did from 1990-2020, and even in the absence of that growth, housing demand will remain strong.
LA county lost several hundred thousand residents from 2020-2024. did that cause the price of housing to go down? it seems not to have.
Looking at LA county specifically: I just checked quickly and it looks like you are correct about the population there being down by ~3.8% from 2020-2024 (which is about 450,000 people, however there are still 9.6M people there and it is still the most populated county not only in CA but also the entire US). 450,000 is a lot less people. But when I google "why are housing prices still rising in LA despite population declining", all of the answers start by explaining the imbalance of supply and demand. "Limited supply due to tough zoning and restrictive permitting process, high construction costs, and expensive dirt, and population increases (guess AI hasn't gotten the memo that population has actually decreased)". We know supply is a big issue with low inventory across the whole country. But with that many less people in LA county now than 2020, you'd expect the decrease in demand would be enough to correct the supply/demand imbalance locally... So, good question...
Perhaps supply and demand were so out of whack before 2020 that 450,000 less people still isn't enough to create a balanced market? Foreign investment? A demographic shift with more wealthy people buying there? Record-breaking high prices in the upper end of the market skewing the entire market upward? Perhaps many of the people leaving have held on to their property and rented them out instead of selling? The lock-in effect of the period from 2016-2022 when interest rates were super low, causing owners with those low rates to not want to sell? Prop 13? More detached single family homes changing hands than attached leading to higher average sales? Prices adjusting for inflation? The fact that LA county has a high number of investor-owned properties? A combination of the above factors?
I really don't know the market there well enough to guess the definitive answer but I know when I break down the data in my own market, I see a wide variation in price trends in the individual price bands. For example the "entry-level" price point almost always has high demand and trends up, whereas luxury is much more volatile and just a few sales in the very upper end of the market can skew the overall averages upward or downward drastically month to month. So I think in order to pin this down we'd have to have someone intimately familiar with the various factors at play weigh in, especially demographics and market trends in the individual price points. Maybe more lower-income people are moving out due to affordability, while wealthier people are moving in/ foreign investors are buying things up, driving prices up? I would think foreign investment would be a big factor for both LA and San Francisco at least, which could keep prices high despite losing population.
also lack of land all the easy stuff is built on .. its not like other markets were you can expand in every direction. Like a Texas or many mid western metro. - 1yBenjamin FinneyPro MemberLender · Asheville - Charlotte · Member since 2018 · 16 posts · 4 votes
Well thought out response @Jay Hinrichs . All great points, there are some beautiful areas of CA. I lived in the Central Valley for a while a couple years ago and as a native New Englander was shocked when I moved there that not every part of CA is far left liberal; just in the major cities. To note, every major city in the country is blue, yes even Dallas and Houston.
Also @James Wise remember real estate is local and there are deals to be had in every market; even in a state where the population is declining like CA there can be great investment opportunities to scoop up. I usually scoff at real estate experts who just talk about national or regional macro trends. Every sub market moves on it's own trajectory. Heck sometimes it even comes down to block to block trends (think multi family in different school zones from one block to another). National/ regional/ state trends are certainly important, but knowing the local market and what investment strategy to use depending on what is happening is even more important.
- Real Estate Agent · Nashville, TN · Member since 2015 · 2k+ posts · 2k+ votes1y
I'm just here for the comments....
- Real Estate Agent · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes1y
Quote from @Steve K.:
Quote from @Nicholas L.:
one thing that has been interesting to me is that even as CA's overall growth has slowed / stopped, RE prices have remained high. so there is still a tremendous, tremendous demand component even without the same population growth.
thoughts on this?
I think the "population decline" is falsely reported and exaggerated by certain media outlets that have a political agenda against CA. There were only a few years of population loss during covid and it was minimal, more like flat than a decline and probably covid-related because immigration wasn't really happening as much during covid. Then in 2023 the population began growing again by around 75,000 people, and last year 2024 that number was 233,000 net population gain which is second only to TX, and more than double AZ at 109,000. So the raw numbers and the sensational headlines about an "exodus from CA" seem to contradict each other.
Also keep in mind there isn't enough housing to go around anyways. So having a population decline, at least for now, isn't a major concern. But if you look at where people are coming from when moving down here, they are generally from other expensive markets. This could be an indicator that the people moving in have money, which just further increases values, rents, etc.
- Residential Real Estate Agent · Atlanta, GA · Member since 2009 · 381 posts · 134 votes1y
One a side note, my mother's cousin bought several properties for 70k or so in California in the 1970s, it was a big deal then. You can guess what the value is now on those same properties they still own.
- 1yTwana RasoulBusiness MemberReal Estate Agent · San Diego, CA · Member since 2017 · 1k+ posts · 1k+ votes
I transitioned from investing in Midwest real estate to focusing on properties in San Diego, CA, about four years ago. As a local investor, I always recommend starting where you live—it gives you a better grasp of the market and makes management easier.
From a purely numbers perspective, investing in a high-cost coastal market like San Diego has allowed me to grow my wealth far more quickly than I ever could in the Midwest. While cash flow is important (and still achievable here), asset appreciation is what truly accelerates wealth-building.
Think of it like the stock market: billionaires don’t get rich from dividends (similar to cash flow); they grow their wealth through the appreciation of their holdings (similar to property value increases). High-demand, high-growth areas like San Diego naturally amplify this effect.
On top of that, managing fewer high-value properties here—like a 4-unit in San Diego—has been much simpler and more efficient than managing 10–20 properties in lower-cost markets with higher capex and slower rent and value appreciation.
Many beginner investors, however, lack a firm grasp of basic real estate finance. They often fail to calculate properly and realize that investing in a high-cost area can generate far more wealth over time than purchasing in a lower-cost market.
Interestingly, I know quite a few people who invest locally in San Diego California and publicly complain about the state’s politics. Yet, they continue to buy real estate here—and for a good reason.
Compass5122 Reviews - Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1yPlease explain how having a lot of appreciation in non-cash flowing properties makes you wealthy without having to have a job. If you sell the asset to claim the equity, isn't that a rather high tax? Then of course, you no longer have the asset. If you have a rental in CA, don't you run into eviction moratoriums, fires, earthquakes, taxes, insurance difficulties
Quote from @Twana Rasoul:
I transitioned from investing in Midwest real estate to focusing on properties in San Diego, CA, about four years ago. As a local investor, I always recommend starting where you live—it gives you a better grasp of the market and makes management easier.
From a purely numbers perspective, investing in a high-cost coastal market like San Diego has allowed me to grow my wealth far more quickly than I ever could in the Midwest. While cash flow is important (and still achievable here), asset appreciation is what truly accelerates wealth-building.
Think of it like the stock market: billionaires don’t get rich from dividends (similar to cash flow); they grow their wealth through the appreciation of their holdings (similar to property value increases). High-demand, high-growth areas like San Diego naturally amplify this effect.
On top of that, managing fewer high-value properties here—like a 4-unit in San Diego—has been much simpler and more efficient than managing 10–20 properties in lower-cost markets with higher capex and slower rent and value appreciation.
Many beginner investors, however, lack a firm grasp of basic real estate finance. They often fail to calculate properly and realize that investing in a high-cost area can generate far more wealth over time than purchasing in a lower-cost market.
Interestingly, I know quite a few people who invest locally in San Diego California and publicly complain about the state’s politics. Yet, they continue to buy real estate here—and for a good reason.
and such? Seems to be a stressful way to bet on the future. But, maybe that's just me.
- 1yTwana RasoulBusiness MemberReal Estate Agent · San Diego, CA · Member since 2017 · 1k+ posts · 1k+ votes
It’s understandable why so many investors focus on cash flow when evaluating real estate. After all, platforms like BiggerPockets were started by investors targeting Midwest and Southern markets, where properties are much cheaper, and cash flow is often the primary focus. However, cash flow is just one of several factors to consider during an evaluation.
San Diego, for example, is often overlooked, but it’s actually one of the best long-term cash-flowing markets in the U.S. Why? Because rents here tend to outpace inflation over time. Fun fact: cash flow is taxable, while equity appreciation is not. There are multiple ways to utilize equity without paying taxes, such as cash-out refinances, HELOCs, and 1031 exchanges, making appreciation a powerful wealth-building tool.
Many people lump all of California into one bucket, but it’s a massive state with many distinct markets. I can only speak to San Diego, but here, we have some of the lowest vacancy and eviction rates in the country. While tenant laws are tougher, the tenant pool is generally much higher quality. In contrast, when I owned properties in the Midwest, evictions were easy, but the tenant pool often made frequent evictions unavoidable.
That said, San Diego is a high-barrier-to-entry market and isn’t for everyone. It requires a solid understanding of real estate finance and long-term strategy.
Compass5122 Reviews - Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1yFor the most part I like San Diego, though we spend our time not there, but in Laguna which I much prefer. And, you keep saying "long term". Yes, I agree. If an investor is able to / willing to, survive "long term" in San Diego, there are likely to be benefits of investing there, eventually.
Quote from @Twana Rasoul:
It’s understandable why so many investors focus on cash flow when evaluating real estate. After all, platforms like BiggerPockets were started by investors targeting Midwest and Southern markets, where properties are much cheaper, and cash flow is often the primary focus. However, cash flow is just one of several factors to consider during an evaluation.
San Diego, for example, is often overlooked, but it’s actually one of the best long-term cash-flowing markets in the U.S. Why? Because rents here tend to outpace inflation over time. Fun fact: cash flow is taxable, while equity appreciation is not. There are multiple ways to utilize equity without paying taxes, such as cash-out refinances, HELOCs, and 1031 exchanges, making appreciation a powerful wealth-building tool.
Many people lump all of California into one bucket, but it’s a massive state with many distinct markets. I can only speak to San Diego, but here, we have some of the lowest vacancy and eviction rates in the country. While tenant laws are tougher, the tenant pool is generally much higher quality. In contrast, when I owned properties in the Midwest, evictions were easy, but the tenant pool often made frequent evictions unavoidable.
That said, San Diego is a high-barrier-to-entry market and isn’t for everyone. It requires a solid understanding of real estate finance and long-term strategy.
Still, you have to live "today's day" - today. And the question is if the risk is worth it, today, not a few decades from now. Live where it make you happy, invest where you can make money. - 1yTwana RasoulBusiness MemberReal Estate Agent · San Diego, CA · Member since 2017 · 1k+ posts · 1k+ votes
It’s understandable why so many investors focus on cash flow when evaluating real estate. After all, platforms like BiggerPockets were started by investors targeting Midwest and Southern markets, where properties are much cheaper, and cash flow is often the primary focus. However, cash flow is just one of several factors to consider during an evaluation.
San Diego, for example, is often overlooked, but it’s actually one of the best long-term cash-flowing markets in the U.S. Why? Because rents here tend to outpace inflation over time. Fun fact: cash flow is taxable, while equity appreciation is not. There are multiple ways to utilize equity without paying taxes, such as cash-out refinances, HELOCs, and 1031 exchanges, making appreciation a powerful wealth-building tool.
Many people lump all of California into one bucket, but it’s a massive state with many distinct markets. I can only speak to San Diego, but here, we have some of the lowest vacancy and eviction rates in the country. While tenant laws are tougher, the tenant pool is generally much higher quality. In contrast, when I owned properties in the Midwest, evictions were easy, but the tenant pool often made frequent evictions unavoidable.
That said, San Diego is a high-barrier-to-entry market and isn’t for everyone. It requires a solid understanding of real estate finance and long-term strategy
Compass5122 Reviews - Member since 2025 · 15 posts · 8 votes1y
Great food great weather beautiful women tons of beaches as well as wild life we're on the coast but we also have dozens of lakes throughout the state. California has everything. Have you ever been to Napa? Northern California countrysides are amazing. Gavin Newscum definitely put a bad blemish on our state but it's still beautiful.
- Member since 2025 · 15 posts · 8 votes1y
Great food great weather beautiful women tons of beaches as well as wild life we're on the coast but we also have dozens of lakes throughout the state. California has everything. Have you ever been to Napa? Northern California countrysides are amazing. Gavin Newscum definitely put a bad blemish on our state but it's still beautiful.
Quote from @Twana Rasoul:
It’s understandable why so many investors focus on cash flow when evaluating real estate. After all, platforms like BiggerPockets were started by investors targeting Midwest and Southern markets, where properties are much cheaper, and cash flow is often the primary focus. However, cash flow is just one of several factors to consider during an evaluation.
San Diego, for example, is often overlooked, but it’s actually one of the best long-term cash-flowing markets in the U.S. Why? Because rents here tend to outpace inflation over time. Fun fact: cash flow is taxable, while equity appreciation is not. There are multiple ways to utilize equity without paying taxes, such as cash-out refinances, HELOCs, and 1031 exchanges, making appreciation a powerful wealth-building tool.
Many people lump all of California into one bucket, but it’s a massive state with many distinct markets. I can only speak to San Diego, but here, we have some of the lowest vacancy and eviction rates in the country. While tenant laws are tougher, the tenant pool is generally much higher quality. In contrast, when I owned properties in the Midwest, evictions were easy, but the tenant pool often made frequent evictions unavoidable.
That said, San Diego is a high-barrier-to-entry market and isn’t for everyone. It requires a solid understanding of real estate finance and long-term strategy
Appreciation is tax deferred not tax free for RE investors meaning if you sell without a 1031 or dying, taxes are owed.
Rent growth has more impact on cash flow than initial cash flow on a long hold.
Case Shiller used to publish the top residential return large cities since 2000. I have not seen it in a few years, but the top 3 were CA cities and the top of the list was heavily CA cities. When you looked at the numbers on the top 3, they all had good cash flow and great appreciation (the numbers were calculated as though no equity had been extracted). It was bonus that CA had near fixed property taxes.
The low vacancy rate decreases the odds of getting a bad tenant because the tenants realize then will need a good LL reference to obtain local housing. Not only is the eviction rate near the lowest in this country, but the delinquency rate is near the lowest in this country. So any difficulty with evictions is mitigated by rarely having to perform an eviction.
There is a reason that CA has the highest percentage of investor owned SFR in the country and the reason is not that there is a bunch of stupid RE investors investing in CA. It is because the return has been outstanding for decades and the data projects it to continue.
Total Investor Home Purchases Are Unlikely to Dip Due to Rising Interest Rates | CoreLogic®
Why do people buy property in California? It is for the great return and the ease of owning.Never the less, I recommend RE investors invest in their local market. This is true if it has good initial cash flow or poor initial cash flow (Like my San Diego market).
Good luck
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1yLol. You don't have to live in California to enjoy all it has to offer. Putting up with the daily life hassles in CA doesn't justify being near the beach that you don't have time to enjoy. We fly in, we stay at Laguna, Santa Barbara, Napa, and we fly out. None of the daily grind. If you love living that way, more power to you, enjoy! We're central, so we can be anywhere in the country pretty quickly enjoying all of the benefits thereof.
Quote from @Khyree Randall:
Great food great weather beautiful women tons of beaches as well as wild life we're on the coast but we also have dozens of lakes throughout the state. California has everything. Have you ever been to Napa? Northern California countrysides are amazing. Gavin Newscum definitely put a bad blemish on our state but it's still beautiful.
- Member since 2025 · 15 posts · 8 votes1y
@Ken M. There are hassles everywhere pick your poison. Half the time things aren't even as bad as most people make them seem. Most people are just whiners and complainers. You can either complain or do something and make a difference. I'm California born and raised and I loved it. Good and bad.
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