How to Find San Diego Real Estate Investment Opportunities

With the San Diego real estate market showing the signs of an upswing, many southern California residents are turning back towards real estate as a viable investment option. According to national data analysis company, DataQuick, 31.4% of the homes purchased in southern California in February 2013 were bought by absentee owners. While some homeowners are taking advantage of still-low interest rates and rock-bottom prices to purchase vacation homes, many are seeing the market providing a promising atmosphere for investors.

Over the past few months, there have been fewer and fewer San Diego homes for sale on the market. This has created intense competition among buyers, and many newly listed homes are now receiving offers within the first couple of days. Many potential investors see this activity as a sign of big gains to come in the local real estate market and are jumping on the opportunity to invest in residential rental property before an increase in prices drive up rental rates.

What Types of Property are Investors Purchasing?

Thanks to conditions in the San Diego real estate market which are still pretty beneficial to buyers, investors are finding opportunities in all different types of residential real estate. DataQuick also reported that the median price paid for real estate by absentee owners was $250,000 in February. This amounts to a 26.3% increase over the median price seen during the same month in the prior year.

Many investors are finding great values in condo units and single-family homes, but the popularity of small multi-family real estate is as strong as ever. Duplexes, triplexes and fourplexes provide owners with a number of different advantages and allow investors to leverage their funds to bring the highest income and biggest gains.

What are the Advantages of Invest in Duplexes, Triplexes and Fourplexes?

If you're looking to receive multiple income streams from a single purchase, these types of properties may be the best investment choice for you. Some of the reasons buyers are flocking to duplexes, triplexes and Fourplexes in the San Diego real estate market are:

  • Multiple Income Streams – By having multiple units you are able to lower the overall risk associated the income sources. With a single-family investment home, if it is unoccupied or the tenant fails to pay rent, you receive nothing; with a fourplex you will still be receiving income from three units if one is unoccupied or otherwise does not provide revenue.
  • Value Increase Based on Rent – The valuations for multi-family investment properties is based on the rental income, just as for larger commercial real estate transactions. This means that increases in the property's value would come from increased rental prices and lowered expenses. With a rise in the rental market, investment properties can see significant gains in value.
  • Easy to Manage – Owning multiple units right next to each other makes renting and managing your units much simpler than owning multiple single-family properties all around town.
  • Low Down Payment – For investors willing to live in one of the units on their multi-family property, a 3.5% down payment FHA loan is a realistic option.

If you have been looking at San Diego homes for sale with the intent of purchasing investment property, many of the factors in the market are pointing at now as an ideal time to purchase before we see really start to see big gains in the residential market. With so many great opportunities in San Diego real estate at the moment, don't overlook duplexes, triplexes and fourplexes. These multi-family investment options have a number of benefits over single-family homes and can mean a steady income stream and big capital gains for you in the future.