Blog Post

California City Interest Rates: Everything You Should Know Before Investing in Property

Fred Whitney • Jul 14, 2023

Are you weighing your options on investing in California City rental property? Perhaps you’re still thinking about investing in property in the area, but might be thinking twice because you’ve heard about the rising inflation rates in some California cities.

Interest rates will grow. As such, it’s important to consider facts before investing in California City property. In this blog, we discuss the current real estate interest rates and how they may impact your investments. In addition, we mention other essential factors that are likely to influence your strategy. Take a look at how you can maximize returns on your investment.

Current Real Estate Interest Rates in California City, CA

Note that real estate interest rates change quickly at all times. You may have to adjust your plans if they suddenly change when you decide to take action. Still, the current rates can help give you a reliable estimate to make an informed decision. Here are the current mortgage rate trends in California City as of March 6, 2023:

30-Year Fixed: 6.95%
15-Year Fixed: 6.25%
5-Year ARM (Adjustable Rate Mortgage): 6.42%

These rates come from Realtor.com, which collects data from Icanbuy LLC. Their payment rates do not account for taxes and insurance premiums. Your unique circumstances will also apply to the final rates, such as having a spouse who served in the military or the loan type you intend to make.

How much you will pay for your investment property will depend on your scenario. Likewise, selling or renting the property that you already own will involve these factors when a potential buyer shows interest. Consider speaking to a California City property management company for a professional assessment of your options.

Benefits of Investing in a California City Home

Investing in property in California City comes with many potential benefits. California is an excellent area to invest in rental properties, particularly California City. This city in Kern County is among the counties with the

most renters in the state, which decreases the chances of your home sitting vacant should you choose to rent it out. Some of the key advantages that attract residents include the following features:

Low Cost of Living

California City’s cost of living is 5% lower than the national average. In addition, other factors that affect this cost include careers and average wages. Depending on a person’s lifestyle, they can easily enjoy the vibrant culture and ease of access that the area offers.

Low Housing Expenses

Housing expenses in California City are 49% lower than the national average. However, the utility prices are 58% higher, which will still depend on a person’s lifestyle. Likewise, transportation expenses are 16% higher than the national average but make sense considering the accessibility it offers. Here’s an overview of the current rates of common expenses based on

PayScale data:

Median Home Price: $227,909
Median Rent: $692.96 per month
Energy Bill: $279.73 per month
Phone Bill: $300.93 per month
Gas: $3.95 per gallon

Good Food and Grocery Options

Although California City’s grocery prices are 10% higher than the national average, its options are still diverse and affordable compared to other parts of the state. Here's a quick look at the average prices of essential food items:

Loaf of Bread: $4.27
Gallon of Milk: $2.68
Carton of Eggs: $2.48
Hamburger: $5.65

Access to Healthcare Facilities

California City has immediate access to at least

five hospitals with high recommendations from local patients. Moreover, healthcare in the city is generally affordable, at only 1% higher than the national average. Here are some average costs of various services:

Doctor's Visit: $126.41
Dentist Visit: $109.06
Optometrist Visit: $119.07
Veterinary Visit: $60.88

Tax Benefits

California City investors can enjoy numerous tax benefits, such as from repairs. Repairing your investment property is also a great way to improve it while saving money from a tax write-off. Whether you repaint the property's exterior or interior, fix the floors, replace the gutters, or get an electrician to bring it up to code, you can write them off within the year that you needed to conduct the repairs.

What To Look for When Investing in California City Property

When you’re looking for properties in the local real estate marketplace, you need to assess your needs before investing. For instance, if you do want to get into real estate investments for rental purposes, then you'll want to ensure that your property is something that appeals to tenants who recognize the value of living in California City.

While you can get help from a professional property management company to calculate the potential returns on your California City investment, you can do some of the math on your own to get an idea of your gains and losses when investing in property. Consider the following things before buying a real estate asset.

Attractive Location

Your California City property’s location is a big factor in its value. Valuable property justifies how much you would charge for the property should you sell it in the future. Likewise, it rationalizes how much rent you would charge tenants if you go the landlord route.

Maintenance costs in desirable areas can also be higher, which may affect your rental or sale rates. Meanwhile, high inflation in attractive locations could influence properties to retain their value, making it a good investment in the long run. Overall, it pays to research where you are going to invest in local property before proceeding with your plans.

Property Type

Consider the kind of property you’re looking to buy. Depending on its type, the property may appreciate faster than others during high inflation periods. For instance, single-family homes in desirable neighborhoods might do better than two- or three-story condominium units in appreciation. Furthermore, luxury properties are most likely going to appreciate faster than a regular home in a not-so-great area.

If you plan to invest in property for commercial purposes, you may have better chances of experiencing growth in values. After all, businesses need to operate despite inflation. Thus, running a rental property in California City for commercial purposes is a good option if you have liquid capital and are expecting higher returns on your investments.

Low Property Value

Prices can rise quickly in California, especially when the market is going through high inflation. You could maximize your ROI when you look for undervalued properties. However, it can take time from all the research you would do to secure such properties in the area.

In addition, sprucing up the property can be challenging when your property investment venture is not your main source of income. As such, you might want to look into your property management options to find deals and maintain them properly.

Property Features

Just like the general location of your investment property, be sure to look at the property itself. What does it have to offer potential tenants that make your place an ideal living space? Even if you invest in an undervalued property in a high-inflation environment, you can work to bring it to a better condition.

You could fix the property yourself to highlight its features or bring in a professional property manager to source the best local contractors to work on the place. Reliable property management companies like JBL & Associates can help you assess your property features, suggest improvements, and maximize your California City investment.

Affordable Closing Costs

Certain entities can charge specific fees when you purchase any property in California Cities. Among these different entities are title companies and lenders. All the fees they charge could add up and go beyond your initial budget when planning to invest in property.

As such, it's important to ensure that you understand all the closing costs associated with buying California City property. Be sure to plan, understand the terms of your financing options, and estimate all your expenses before you set anything in stone.

How Can a Professional Property Management Company Help Me?

Anyone investing in a California City property for rental purposes can take advantage of the benefits that professional property management companies like JBL & Associates offer. Running a rental property anywhere is a challenge, especially if you do it as a side hustle and you don’t have direct experience.

Working with professional property management in California City can help you maximize your rental property investment. Rather than dealing with the tenants yourself, you can rely on a professional to oversee the associated tasks for you. From securing tenants to addressing their complaints, you can delegate all the tedious responsibilities to your property manager while you focus on your primary operations.

Additionally, rental property managers help with rent collection and can even provide solutions for late payments. This way, you can secure your income and ensure that you won’t lose out on any earnings.

The Bottom Line

Renting your property can be a good idea since California City is generally a desirable place to live in. Accordingly, you have better chances of securing tenants who can help you make up for your purchase. However, running a rental business can be challenging. Consider speaking to our experts at JBL & Associates to assess your situation and help you run a successful rental business.

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