Real-Life Analysis of a Rental Property Market: Palmdale, CA

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I’ve been talking a lot about markets lately, and oddly enough I was asked on three separate occasions just in the last week my opinion as to whether or not I thought Palmdale, CA would be a good place to invest in a rental property.

So I thought, well, people are obviously wondering — so how about I just make a whole article out of it? I thought it would be a cool idea because it will hit on not only what fundamentals about a market I look at when shopping for places to invest, but it will also tie it into a real-life example so you can see how the concept of knowing the market fundamentals can actually be applied to a real scenario.

What I Look For in a Rental Property Market

Before I can jump into actually assessing a market, I want to make sure you know more fundamentally what things I will be considering.

The basic factors I look at before jumping into any market are:

The Numbers

If I buy a property in that market, how will I be able to make profit? Will it allow for cash flow, or is there appreciation potential? Or will it just cost me money to own a property in that market (which is bad)? You should never go into any investment without understanding the numbers.

Appreciation Potential

I never base my buying decisions on the appreciation potential of a property because I don’t invest for appreciation; I invest for monthly cash flow. But whether or not a market is anticipated to appreciate can sway my opinion on buying when it comes to balancing trade-offs.

For example, if a property or market is lower on the cash flow potential side but it has a tremendous possibility for appreciation, then I may go for it. Or if a market has no appreciation potential but has high monthly cash flow, then I might be OK going for it because the high cash flow keeps me in the game. So, I at least consider appreciation potential in my list of factors.

multifamily-markets

Population: Growing or Declining?

Is the population increasing or decreasing? Why does it matter? It matters for exit strategy, vacancy, and tenant quality, all of which can dramatically affect your bottom line. Exit strategy can affect it for the ability to sell it later (and for how much); vacancies are extremely expensive, and if the population is declining then there will continue to be fewer and fewer renters, which will increase your vacancy times; and then bad tenants are just expensive all around. You have better options for exit strategy, tenants, and fewer vacancy rates when the population is growing and not declining.

Jobs

What are jobs tied to? Industry. Every job is part of an industry. The more industry options you have in a particular market, the more jobs there are likely to be, and those jobs bring in more people. But then the additional bit about industry is that, preferably, the market you are looking at supports multiple industries.

If a market has one huge industry and that industry does in fact produce a huge number of jobs, which we’ve already established is a good thing, that is great, but what if that one industry crashes? With one big swoop, all of those jobs we were reliant on are gone, and boom, there go the people.

Related: How to Analyze the Real Estate Market to Avoid Major Investing Mistakes

Remember Michigan with the automobile industry? It was devastating to the whole state, certain cities more than others, when the automobile industry tanked because that was the main big industry there. There is no way to predict the future of any one industry, so if you choose a market with several big industries, you are helping cushion yourself should one industry go out because the others that are there can carry the weight of jobs. If the market you buy in only has one major industry, you are increasing your risk tenfold because you don’t know what may happen to that industry at any time.

Population

What is one of the best ways to support an increasing population in market? Have a lot of jobs available for people there! People go where jobs go. If there are no jobs, there are going to be few people. Jobs and number of people are directly proportional. So the more jobs, the more people, meaning population increase, meaning the benefits stated above.

Tenant Laws

Specifically for a rental property owner, the laws that are important are the ones regarding tenants’ rights. If a state is considered “tenant-friendly,” it means the laws regarding tenants’ rights are more in support of the tenants and less in support of the owner. This means things like longer times to get an evicted tenant out of the property, legal expenses to the owner to get them out, etc. Basically, it can cost the owner a lot of money.

In states considered to be “landlord-friendly,” the tenant laws are more in support of the landlord/owner in the sense of faster times to get rid of a bad tenant, less or minimal cost to do so, etc. Investing in a landlord-friendly state reduces a lot of risk for expense should you get a bad tenant. It’s not always bad necessarily to invest in a state that is considered to be “tenant-friendly,” but it’s something that should at least be considered.

keep-tenants-happy

Tenant Quality

I say this one to point out the problems associated with, say, investing in a total “troubled” area. If where you are thinking of investing is mostly populated with a rough crowd, just know that bad tenants can be one of the costliest things to a rental property owner. This is especially pertinent in specific neighborhoods of different markets, but it should even be considered for bigger markets.

If a market has a declining population and/or not much for jobs and industry, what kind of people do you think your renter’s pool is going to have? Probably not as many upstanding citizens (who pay their rent) as one would hope. Not saying there won’t be any, but always think in terms of the majority. At the point I’ve assessed population, jobs and industry, I probably have already properly ruled out a market or decided to pursue it, because at that point the tenant quality is often inherent in those other factors so I don’t necessarily need it to make my decision. But it’s worth making a note of.

An Analysis of an Actual Rental Property Market: Palmdale, CA

In order to help you really learn to apply these factors, I’m going to go through here exactly how I went through my initial analysis in my head when I was asked what I thought about Palmdale, CA as a potential place to invest in rental properties.

Now, I want to preface this analysis with my stance on whether I would invest in this market personally is complete personal opinion. If you read this but then decide you want to buy a rental property there (obviously that gives it away that I don’t want to invest there), am I going to think badly of you? Nope. I support anyone doing whatever they want. The only reason I present my analysis of this market is to give you an idea of the things I look for and introduce you into getting more familiar with analyzing markets for yourself.

Related: How to Know if Any Given Real Estate Market is Wise to Invest in (With Real Life Examples!)

My second caveat to sharing my analysis with you is that I never made it past the initial analysis phase in order to look at any official statistics or numbers regarding this market. Due to what I came up with just in my initial analysis, I didn’t care to further pursue looking into more details. Had my initial analysis come back more supportive of Palmdale possibly being a good place to buy a rental property, then I would have started looking at more concrete numbers. So, before you start showing me numbers and asking why I didn’t consider them, there it is — I didn’t care. Hopefully once I go through the analysis, you’ll understand why I didn’t care to look them all up.

Are you ready? Following the exact same list I presented up above, I’m going to go through each item and tell you what ran through my head as I thought through each one in regard to Palmdale, with the addition of just a little bit of background information about the city in case you aren’t familiar with it.

zillow-properties

Background

Palmdale, CA is a city about 1-1.5 hours Northeast of Los Angeles. It is considered to be in the “high desert” and is technically considered to be part of the Antelope Valley (ironic, since there is nothing “valley” about it — it’s all desert), and it neighbors Lancaster.

The reason people are interested in potentially buying rental properties in Palmdale is because of the numbers. Compared to most of the rest of SoCal, the price to buy properties in Palmdale is much more affordable, and for investors, the properties at least start to hint at being able to provide positive monthly cash flow. I actually lived in Palmdale/Lancaster for about eight months when I first moved to California because that is where my job was based out of, so I have a significant amount of familiarity of the area.

The Numbers

So, what do potential returns there look like? Well, not great in my opinion. Just pulling up Zillow to get an idea of some values, I’m seeing a property listed for $350,000 that would potentially rent for $1,950/month, I see a property listed for $240,000 that would potentially rent for $1,625/month, I see a foreclosure listed for $161,000 that would potentially rent for $1,475/month — and a quick side note about foreclosures, I see a significant number of foreclosures listed.

So let’s look at this — just what I am noticing at first glance. Since people do so love the 1% and 2% rules, let’s just use those. Do any of those properties listed hit those? Not even close. That foreclosure property almost sneaks into the 1% category, but it’s not there. This is a perfect example of a proper way to use those “rules,” by the way — just use them as a first basis of analysis. I will never use those numbers to make any actual decisions, but just seeing whether or not properties in an area come close to hitting those at all will tell me a good bit.

In a lot of markets I don’t necessarily require that a property hit the 1% rule for me to invest, but whether or not a property does hit the 1% at least or not does matter to me in markets that notoriously have higher taxes and insurance costs. All CA cities, to me, fall into that category. Florida, too. Just because I know those costs and other expenses are notoriously higher in those states, I will be a lot more hesitant to scoot away from properties coming up as not meeting the 1% rule. So, without even running actual numbers on any properties in Palmdale, I can see that the general trend of numbers not supportive of positive monthly cash flow in most cases.

Appreciation Potential

Again, no specific stats here, but it is a known fact that high desert cities are the first to decline in value and the last to recover during a recession. They also do not experience the same levels of appreciation as, say, Los Angeles or San Francisco would. So, that should be noted. As I said before in talking about appreciation potential, it’s about the trade-offs. If the cash flow is minimal but there’s a chance of it having Los Angeles-style appreciation, then I might be more inclined to consider it. But in Palmdale’s case, compared to the rest of SoCal, it’s likely to appreciate much less.

Related: The Real Estate Market: How to Analyze and Predict Cycles

Population: Growing or Declining?

This one I have no idea. I actually believe the population is increasing in Palmdale, and especially Lancaster, because of all the building and development that is going on there. SoCal in general of course is always a growing population, but I’m not sure on Palmdale. So for now we’ll consider this one an unknown. (But I essentially skip over this factor once I look at the rest of them. You’re about to find out why.)

Industry

This one is a doozy for Palmdale in my opinion — “doozy” in the sense of “not good.” The primary industry supporting Palmdale is the aerospace industry. Literally every aerospace defense contractor company has a building at the Palmdale Airport. Lockheed, Boeing, Northrup, NASA — all the big boys.

Because Palmdale is located in proximity to Edwards Air Force base and other government aerospace test bed hotspots like the Mojave Desert, it makes sense to station all of those companies nearby. I was working at Lockheed, hence why I ended up there. Anywho, the only other “industry,” if you want to call it that, is Edwards Air Force Base. It’s about a 45 minute drive away, but fortunately for Palmdale and Lancaster, they are the only sizable cities even close to Edwards.

So a lot of the military folks who work there may likely end up living there (although more likely Northern Lancaster so they are closest to the base). But for the most part, aerospace is really the only substantial industry supporting that area. As in, one major industry. That in and of itself is a red flag for me when looking at different markets, but more so with aerospace — on one hand, it’s a really sturdy industry because it’s beefy, a lot going on, and plenty more coming; on the other hand, it can be volatile.

Especially with most of those big boy companies focusing on military airplanes, who knows what kind of fluctuations in defense budget could cause a major decline in business up there for some amount of time. All I know and all I care about is if the aerospace industry has any kind of major tank at any point and any of those companies pulled out of the area, the entire city of Palmdale could go down into the dumper. And quickly. Aerospace is the reason that town is alive and sturdy, so if there were to go, who knows what.

turnkey-market

Jobs

Going hand-in-hand with industry obviously, the job base around Palmdale is going to be mostly dependent on the aerospace industry. This one fluctuates a lot more than the industry as a whole does, mostly because jobs within the aerospace sector can go dramatically up or down within the aerospace umbrella without the entire company collapsing.

On one hand, aerospace companies are oftentimes thriving regardless of other industries of the world. They are a fairly elite sector, and they employee a ton of people — both salaried employees and union workers. So they cover all spectrums of employee levels. On the other hand, layoffs can happen very quickly with these companies. The minute the government’s defense budget gets cut, workers will be at risk because most of these companies are paid by through the government’s budget.

Or Boeing, for example, deals more in the commercial airline space, but how volatile is that industry? Quite! So jobs with aerospace can be extremely awesome or extremely not, depending on the political situation of the moment. The Edwards military jobs up there would be sturdier, but still, you’re looking at a smaller pool of jobs in general. The jobs there are very niche.

Tenant Laws

In short, California is tenant-friendly, and it’s been known to be tenant-friendly in an extreme way. I’ve heard numerous horror stories of property owners in California who were absolutely upside-down in getting a tenant out because it would cost them so much money to do so that it would almost be cheaper to let the bad tenant squat.

I’ve heard of fees ranging from $5,000-10,000 just for the eviction costs, and that doesn’t include the money they have to spend on a lawyer because California requires a lawyer to be hired for some aspects of it. And all of this expense is to only get the tenant out after some ridiculous number of months of non-payment because the owner can’t legally force them out any sooner. Again, no exact numbers here, but there are too many horror stories for me to bother looking into them. I can only assume an eviction in Palmdale would cause similar financial disaster.

veteran's association

Tenant Quality

Now, as always when I talk about tenant quality, I really try to tread lightly here and stay as “ethical” with my words as possible. I only say that because talking about any kind of generalization or stereotype of people can get someone in trouble very quickly, especially in the real estate world. The good news is I have absolutely no judgment about any group of people at all, even outside of real estate. All I care about is whether my tenants, whoever they are, are going to pay their rent or not.

Now, in order to decide whether I think a tenant in Palmdale is going to pay me or not — which is what I care about in my assessment — I do have to make some over-generalizations. However, for the record, my over-generalizations in this analysis have absolutely nothing to do with race or anything else. I am simply going off knowing the industry there and knowing the local population there.

In short, in my experience of living in Palmdale/Lancaster, there are basically two groups of people living up there. Aerospace people and locals. The “locals” are either born Palmdale residents, or they are LA locals who are living in Palmdale and commuting to LA for work because they can get so much more house for less money up there than in LA.

Here’s the problem, to me, with this setup. The salaried aerospace people are unlikely going to be renters because they will just buy a house. The union aerospace workers are more likely to be renters because they doubtfully make as much. The born Palmdale locals (sorry for the over-generalization that’s about to happen) are not usually the most upstanding citizens. The locals who are living there to commute to LA probably bought their house there — one of the perks of living up there is it’s actually affordable.

The locals who are living up there to commute who are renting, though, concern me because that is a lot of effort to need to save that much money (it’s an hour+ to LA and in atrocious traffic), and anyone needing to save that much money could quickly start falling to a generally riskier tenant pool. Again, there are exceptions to every stereotype or over-generalization or whatever, but it’s more about assessing the chances of bad things happening.

So to summarize this situation, I don’t feel like Palmdale has a stellar tenant pool to offer me. My opinion is that there is a higher risk of bad tenants that could end up in my property, due to the dynamics of the population.

Now let’s summarize this thing. Honestly, to me, none of these factors really stand out to me as anything promising. I see a lot of risk in just about all of them.

Related: Demographics: The Telling Real Estate Indicator You Should Analyze Before Investing

What could be different in this list that might make me change my mind? Well, first, if the returns were projected to be absurdly high, then I might be willing to take on the risk of the other factors. Or if the returns were still minimal to low (assuming they are even that because I think they might all be pretty negative) but California was landlord-friendly and there were at least a couple more big industries near Palmdale, I might reconsider. Or if the prices were what they are but Palmdale was a big front-runner in appreciation, I might look into it a little further.

See what I mean in terms of trade-offs? I’m often willing to forego one market factor if another factor positively makes up for it.

However, in the case of this Palmdale list, there is so little going for any of it in my opinion that I didn’t even bother pursuing getting actual numbers or confirming any of my assumptions. Yes, my list is all assumptions, but I did live there and am familiar with it enough to assume they are educated assumptions.

So there’s my stance on investing in Palmdale. I’m not interested. Maybe Palmdale is a good option for someone who is dead-set on investing in California because Palmdale does give at least more affordable options, but I’m not dead-set on California, and I can think of at least a handful of other markets where the list of factors I look at show to be way more promising than this one. But again, personal opinion.

What about you? Would you invest in Palmdale? If you aren’t ruling it out, what information do you plan to find out to help you decide for sure? 

Let’s discuss in the comments section!

About Author

Ali Boone

Ali Boone(G+) left her corporate job as an Aeronautical Engineer to work full-time in Real Estate Investing. She began as an investor in 2011 and managed to buy 5 properties in her first 18 months using only creative financing methods. Her focus is on rental properties, specifically turnkey rental properties, and has also invested out of the country in Nicaragua.

21 Comments

  1. John C. Carlson

    Ali,

    I’m an appraiser & have appraised property in Palmdale/Lancaster since 1978. In that time period, there have been 4 “ups & Downs” in the area. You have to hit Palmdale just as it’s bottoming out of a particular downturn and is on the way up again. At the bottom of each price swing, neighborhoods are ghost towns.

    I watched investor groups make a killing in 1986 thru 1992 & most recently as we came out of the last Recession. Most recently, I appraised 8 homes for a lender client which had a very good investor loan program. These investors bought all newer 3 & 4 bedroom Single-Family @ $140k +/- & had no problem renting to reasonable tenants as people were moving back in & needed housing.

    I had to do a rigorous rental search and analysis of investor sales. These investors were coming in with 20 – 25% down and the prices were so low that their PITI was covered.

    So….Palmdale can be a reasonable place to invest, however, you need to know which way the market is going. Haven’t been there for a couple of years, but I don’t believe you can buy a newer home now & rent it such that your PITI is covered

    • Ali Boone

      Hey John! Ooh, thanks for the really good info. I love that you were an appraiser and the numbers you give, because of that, give an actual perspective to how the market has worked.

      A couple questions for you:
      1. When you said the neighborhoods became ghost towns….would that be a major risk to a property owner for vacancy issues? I’m assuming ghost town means no one renting? Curious as to what that did/would do for vacancies.
      2. In all of those years with the ups and downs, do you have any specific things that you believe caused those “downs”? Was in industry, was it aerospace stuff, something totally different?

      Very good info, and thanks so much for sharing! And I agree with you about the current prices not covering PITI.

  2. Andrew B.

    What an informative breakdown, nice write-up Ali! Funny that I and 2 others asked you about this area in a 1 week span (what spurred this inquiry for me was getting curious about Home Union and their offerings there).

    • Ali Boone

      Haha…thanks Andrew! Nothing like repurposing things I’ve already written 🙂 But yes, it was crazy how many times the question came up in just one week…so random! I didn’t even realize HomeUnion was offering stuff there. I looked at their inventory awhile ago, but haven’t checked it out recently.

  3. Steve L.

    This article has next to no concrete facts, mostly assumptions and generalizations. I don’t invest in Lancaster or Palmdale either.

    You missed by far the largest plus to investing in that area. Section 8 vouchers pay out quite high because it is in Los Angeles county.

    A large portion of the aerospace industry rents because they tend to move or be deployed often.

    • Ali Boone

      I warned a couple times in the article Steve that there would be no concrete facts and it was mostly assumptions and generalizations. I knew that going into it, and I was hoping I made that very clear in the article so my approach was known in full–the point of this analysis was to explain why I didn’t bother going further with it and obtaining concrete facts. Too many “no’s” for me to care to pursue it.

      Good note though on the Section 8….but what does that do for the cash flow? Even if Section 8 pays out high, that doesn’t really matter if the property still won’t cash flow.

      Must have been different areas in aerospace than I worked. Everyone I worked with, and knew of, owned and they (we) were all getting deployed. But definitely the union workers and others more transient may rent. But that speaks to the transient factor and what that does for vacancies too…another con for me.

    • Ali Boone

      Hashtag…#smart 🙂 Yep, that’s my theory Timothy. If an area provides great cash flow and has other benefits to it, I’m willing to forego the tenant laws as a major consideration, but when everything else is looking bleek, that only adds to it.

  4. jon Nelson

    Hi Ali
    Great article I have a rental in Lancaster I bought it when it meet the 1% rule not that I cared it is in my self directed IRA so I payed cash and property management is 50 flat rate per month. Property has gone up about 6% a year only had it for 2 years. I probably would not buy at these prices and will sell in 2 years before the next down turn. A couple of concerns with your article I own 12 properties in CA and my favorite thing is property taxes our medium but with prop 13 no matter how much they appreciate the taxes can only go up 3% a year I have properties I bought for 100 now worth over 300 and pay the same tax in other states they have doubled the taxes on me. Also I have evicted 2 people all the way to the sheriff kicking them out both took under 45 days and have never heard of the problems you are talking about unless they ower was a slum lord and gave the tenant an out.

    • Ali Boone

      Hey Jon, thanks for sharing the numbers and experiences. I’m always curious and open to hearing things like this.

      Interesting on the property tax. I know when you buy a property in CA, the tax is then calculated from your purchase price, but I didn’t know about the yearly cap on it after that. That’s interesting, and super cool if you have the appreciation you are talking about! I think the trick there is just, as you would if you are buying for appreciation, make sure you are buying closer to the bottom and not the top. Then you are stuck with the high taxes regardless (if you buy at the top). Interesting note.

      Do those 12 properties cash flow? Does the Lancaster one cash flow, even if it is in your SDIRA?

      The evictions…that’s intriguing to here. I know a few property owners who have had dramatically different experiences (super expensive, months and months of the tenants squatting and can’t get them out, etc.). I wonder then…what are the differentiating factors? Is it per county, is it just the cooperation of the tenants….I have no idea. ?

  5. John Mich

    I live in Lancaster, and have a few properties here in the Antelope Valley. I bought almost all of them during the most recent downturn. I manage them myself and am very very careful with tenant selection. I’m not sure I would feel comfortable owning rentals here if I didnt live nearby and weren’t able to manage them myself. Knowing the right neighborhoods to invest in makes all the difference. A decent neighborhood will give you a better tenant pool to choose from than a bad neighborhood, and here neighborhoods change from street to street. I wouldn’t buy anything at current market prices. Am currently looking out of state markets to keep expanding. Would love to hear your suggestions for markets that meet your criteria.

    • Ali Boone

      Hey John, great info! Supports a lot of my suspicions. I think the general idea that is coming from a lot of the comments is…be sure you buy at the downturn! I mean, that’s kind of true in a lot of markets, but it sounds critical for Palmdale/Lancaster. And I totally agree about it being neighborhood-to-neighborhood. When I lived there, a bad one could be next to a great one, and it seemed like there was no major rhyme or reason.

      Oh! I just thought of another thing! Mello-Roos taxes! They aren’t on all properties, but omg if you buy one that has that….peace out cash flow. I have a friend who bought a house in Lancaster and it had that. Wowza. That tax isn’t specific to the AV by any means, but watch out for it anywhere, even up there.

      Lots of cool markets out right now. Any idea on property types or budget you are considering? My faves right now are Chicago and Indy, KC is still good, Philly is good and has some interesting opportunities available. Let me know preferences and budget and I can definitely steer you somewhere cool.

      • Rez Cury

        Hey Ali, I’d love to hear more about the markets you mentioned or anything as close to NY as possible. Currently living in Brooklyn and the game here doesn’t make any sense. I’m looking to invest up to $100k in a down payment and would like to have a cash flow of at least $1500 a month. I could combine forces with a partner and invest up to $250k for proportional or bigger returns. In your opinion is it safest to pulverize this investment across a few properties (use $100k to buy 3 properties with 30k + 30k + 40k down payments) or just put all your eggs in one basket and buy a large multi family? I’d love to hear your thoughts.

  6. Chris M.

    Sorry but this article is off. You based everything on assumptions and didn’t even bother to get concrete data to give your opinion stronger validity. Although, I agree with your criteria for looking at rental markets, I think you should’ve supported your view point on this market with more factual data ( real numbers and not just assumptions). As for evications, I’ve evicted several tenants in California and Its never cost me more than a couple thousand dollars ( using lawyers from start to lockout).

    FYI. they are going to put a stop for the California high speed rail project in Palmdale, what do you think that’s going to do for appreciation?

    • Ali Boone

      Hey Chris. As I said, I was going solely off assumptions and I was not providing factual data. There were too many ‘cons’ for me to care to go get concrete data. Reason being? If I have to try that hard to figure out why a market might work, I’m trying too hard. There are too many markets out there that are no-brainers…’pros’ in nearly every column, so why bother fighting upstream. The key actual numbers I needed, I did allude to- the property prices versus rents (and those were real numbers, from Zillow). There’s no cash flow up there. And I’m a cash flow investor, so what’s left?

      I responded to another comment about the eviction thing. I am curious about what factors make eviction experiences so different from one another, because I know horrible ones. But, even to your point though about it costing you a couple thousand dollars…that’s not worst-case scenario but that’s a lot! My evictions in GA have never cost me more than $100, if that. But more importantly…what kind of cash flow were you receiving on your properties that that couple thousand dollars didn’t impede on? A couple thousand dollars and no cash flow (just in thinking of properties available now)…..hello, loss. So, let me know, I’m curious.

      I have no idea what a rail stop will do up there for appreciation. I’m not comfortable speculating on something like that, so that thought won’t drive me to buy there.

  7. Matt R.

    Ali, I applaud your efforts. I am not sure about some of the analysis/assumptions?

    Some assumptions to check for further analysis.

    Evictions in LA County average length is 6 weeks and the fee is $225 if you DIY and perhaps $500 to $1000 if you go with lawyer. Somewhere between 30 and 60 days for most evictions is what the reality is.

    Population growth in AV has been 30% past 10 years and WAY above national average.
    In 1986, the population of the City of Palmdale was 23,350. Today, Palmdale is emerging as a rapidly growing and thriving with over 154,535 residents. The City’s record growth has made it one of the fastest-growing cities in America.

    Los Angeles County Economic Development Corp Forecast.
    The LAEDC report predicts significant population gains in Antelope Valley over the next five years.
    Los Angeles County will add 200,000 people, many in the Antelope Valley.

    Median income is higher than national average.
    There are 6500 new aerospace jobs coming that average $30 per hour and on a 10 year contract. Many will be new renters. This area is considered to be the aerospace capital of the world if that ever takes off again.

    It is a valley just in the desert;)

    It has been a boom bust historically no doubt but there are many enormously successful investors who do regular SFR rentals out there and have been doing that for decades. I know you are not a fan and it is not like I am some huge fan or something either. My take is this place is worthy of further analysis for most looking to invest in a more affordable location and still capture the huge growth potential in LA County.

    • Ali Boone

      Possibly, Matt. And if you are interested in doing further analysis, I totally support you in that 🙂 I’ve come to learn you are focused on much different factors of markets than I am, but that’s not to say either is wrong, just different focuses.

      Because I’m cash-flow focused, my response to your info would be–where/what is the cash flow? Not much of that helps me any if it’s already in high market right now and no cash flow to be had. I’m not into speculation while my money sits in a random property. (unless it’s a property I’ve bought for cash in LA or SF…then appreciation is awesome).

      Bigger point though….why focus on somewhere that requires so much effort to justify when there are tons of markets out there that have checkmarks with way less investigation? However, I will caveat that with….I may be interesting in doing said research if it was at the bottom of the market and the appreciation really was solid for happening. But at that point, I’d probably be more interested in something in LA where more appreciation might happen…

      Either way, I think a residing answer is that Palmdale/Lancaster does have to be invested in at a downturn for there to even be hope of good things. Of which it is not currently in.

    • Ali Boone

      Hmmmm….not sure exactly Jessica. I’m around so many markets and learn whether one is tenant or landlord friendly, but I’m not sure where exactly that info can be found. I just get it through talking with everyone involved in the markets. Of course I never just take one person’s word for it, but a general consensus can usually be determined pretty quickly. Sorry, I know that’s probably not helpful. First source would be to ask local specialists, especially property managers since they are the ones who deal with the evictions a lot.

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