It was announced at the 2016 Santa Barbara County Economic Summit last Thursday that rents in the Santa Barbara area have increased 8.7% over the past year, in addition to there being a staggeringly low rental property vacancy rate of less than 1%. Also echoed at the summit, held at the Granada Theatre on State Street, was that the U.S. economy is currently in a very slow growth mode and will likely stay that way for some time. Along with slow growth are expected to remain low interest rates for the foreseeable future. With the low rates of return currently offered by U.S. bonds and the unpredictability of stocks it makes sense that real estate is now being looked at as a preferred method of investment for retirement.
Condos, low-end houses, and multi-unit apartment buildings are currently producing some of the highest yields in the Santa Barbara area. The following available Santa Barbara properties are shown with estimates of what a cash investor could expect regarding their rate of return.
3435 Richland Drive #17, Santa Barbara
Cash Investment: $389,000; Yearly Rent: $24,000; Yearly Expenses: $9,000; Rate of Return: 3.85%
206 Sherwood Drive, Santa Barbara
Cash Investment: $929,000; Yearly Rent: $60,000; Yearly Expenses: $18,500; Rate of Return: 4.5%
118 Los Aguajes Avenue, Santa Barbara
Cash Investment: $4,400,000; Yearly Rent: $319,200; Yearly Expenses: $94,400; Rate of Return: 5.1%
Property appreciation, something not taken into account in the above examples, has also proven to be a big financial benefit in owning Santa Barbara real estate. This is due to the ever present high demand of housing in one of the most desirable areas to live in the US. Over the long term Santa Barbara’s property appreciation rates can add up to substantial amounts of financial gain.
For more information regarding the best investment property opportunities currently available in and around the Santa Barbara area please send your inquiries.