Interest rates can affect many aspects of your financial life and are driven by the monetary policy decisions of the Federal Reserve. Major banks use these monetary policy decisions when borrowing or lending funds.
The Federal Reserve has recently agreed to raise its key interest rate of 1.25% to 1.5%. This marks the third increase in this rate this year. The raised rate will push up rates for credit cards, adjustable-rate mortgages and home equity lines of credit. Its effect on fixed-rate mortgages will not be as pronounced.
Mortgages typically come with 15 to 30 year terms which is far longer than short-term borrowing affected by the federal funds rate. Therefore, mortgage rates which have been below 4 percent for the majority of 2017 are not as sensitive to the incremental rate increases.
How the Interest Rate Increase Will Affect Individuals Seeking a New Mortgage and Owners With An Adjustable Rate
The individuals that are most vulnerable to this rate increase are those who are seeking a new mortgage or already have one with an adjustable rate. If you have an adjustable rate mortgage, the rising interest rates may affect your rate when your introductory period ends.
You may want to consider refinancing your adjustable rate mortgage to a fixed-rate one without extending the term of it. Opting for a 15-year fixed rate mortgage may also decrease the total amount you pay in interest.
In addition, if you’re considering buying a multifamily property through a new mortgage, you should expect an interest rate for a 30-year mortgage to rise to about 4.40 percent, up from the current 3.95 percent rate.
How the Interest Rate Increase Will Affect Rental Property Owners
If you own rental properties, the rate increase may help you out because more people will be tempted to rent rather than buy a home. Increases in occupancy and rental rates can increase the value of your real estate.
By doing whatever you can to keep your interest payments low and paying off your debt as soon as possible, you can ensure that increased interest rates have a less drastic effect on your financial situation.
The west coast economy and population is continuing to grow heading into 2017. The economy is being pushed ahead by technology companies drawing in extremely high paying jobs and the population is continuing to increase due to immigration. These factors both create the huge demand for places to live, both on the high end and the low end. With low vacancy and decade long low new housing starts, the major housing shortage is set to continue for many years forward in California. Rents will continue to rise until the housing shortage can catch up with the ever increasing demand.
MultiFamily income producing investment property in California is the cash cow that just keeps on giving. Rising Rents, Continued Appreciation with the ability to leverage and depreciate….who could ask for more from an investment! Many millennials are now choosing to purchase a duplex or triplex investment property as their first home rather than buy a townhouse, condo or single family. They then live in one unit while collecting rent from the other units, typically living for free or even cash flowing from the income from the other units. This method of early “owner-occupied” investing can lead to quickly purchasing more duplex, triplex, 4plex and larger commercial apartment buildings.
At MultiFamilyOWL.com most of our multifamily investment properties are located in Southern California. Los Angeles County and Orange County in particular are two areas which are growing and appreciating at unprecedented levels and there is no end in sight. With two major airports (John Wayne Airport) (LAX Airport) thriving job market with Software Companies booming and the most amazing weather in the world it is a very hard place to beat.
Multi-family Investment Property and Home Listings in Los Angeles, CA
The most populous county in the United States, Los Angeles County has a population of 9,818,605 and has more people than 42 individual U.S. states. LA County is a fantastic choice to invest in multifamily residential income property. The economy is improving and decreasing unemployment rates are excellent for rising rental rates. Southern California’s great climate, world renowned attractions and celebrity encounters enables many of LA county’s cities to be vacation destinations. Additionally if you convert your apartment into a vacation rental, you will create short term rentals that will yield higher rentalrates.
The city of Los Angeles is the county seat, is the largest city in California and the second-largest in the United States. Encompassing 4,083 square miles, it is larger than the combined states of Rhode Island and Delaware. You may receive higher rents for multi-unit residential investment properties near the coast, however in general the asking purchase prices are higher.
LA County is composed of 88 incorporated cities and two offshore islands, San Clemente and Santa Catalina Islands. However, most of LA County is made up of 140 County-recognized unincorporated communities.
The most populous cities are:
|● Los Angeles – 3,792,621
● Long Beach – 462,257
● Glendale – 191,719
● Santa Clarita – 179,013
● Lancaster – 156,633
|● Palmdale – 152,750
● Pomona – 149,058
● Torrance – 145,438
● Pasadena – 137,122
● El Monte – 113,475
|● Downey – 111,772
● Inglewood – 109,673
● West Covina – 106,098
● Norwalk – 105,549
● Burbank – 103,340
Major divisions of the county are 1) East: Eastside, San Gabriel Valley, Pomona Valley, 2) West: Westside, Beach Cities 3) South: South Bay, Palos Verdes Peninsula, South Los Angeles, 4) Gateway Cities 5) North: San Fernando Valley, portions of the Conejo Valley, portions of the Antelope Valley and Santa Clarita Valley 6) Central: Downtown Los Angeles, Mid-Wilshire.
Los Angeles County is famous for its entertainment industry; all six major film studios (Sony, 20th Century Fox, Paramount Pictures, Warner Brothers, Universal Pictures, and Walt Disney Studios) are located in the county. Besides motion picture and television industries, LA County resident workers are in international trade supported by the ports of LA and Long Beach, music recording and production, and aerospace.
Moreover, there are great tax benefits to owning income producing real estate. We have many duplexes, triplexes, fourplexes, and commercial apartment buildings without rent control, with on-site parking, laundry and separately metered utilities. A property manager can help you control owner/ landlord expenses and if necessary guide you through the Section 8 and eviction process.
Invest with us and request more information about the historical CAP Rates for your preferred LA county cities and ask about the GRM (Gross Rent Multiplier), Net Operating Income and Gross Operating Income for specific listings.
Information gathered from Wikipedia and propertymetrics.com
Thank you for choosing MultiFamilyOwl.com in your search for a duplex, triplex, fourplex or commercial apartment for sale in LA County.
You might be interested in looking in one of these LA County cities: Alhambra – Altadena – Arcadia – Azusa – Baldwin Park – Bell – Bell Gardens – Bellflower – Beverly Hills – Brentwood – Burbank – Carson – Compton – Covina – Culver City – Downey – Eagle Rock – El Monte – El Segundo – Glendale – Glendora – Harbor City – Hawaiian Gardens – Hawthorne – Hermosa Beach – Highland Park – Hollywood – Huntington Park – Inglewood – Lakewood – Lawndale – Lomita – Long Beach – Los Angeles (City) – Lynwood – Malibu – Manhattan Beach – Marina Del Rey – Monrovia – Montebello – Monterey Park – Montrose – North Hollywood – Norwalk – Pasadena – Playa Del Rey – Pomona – Redondo Beach – Rosemead – San Dimas – San Gabriel – San Pedro – Santa Monica – Sherman Oaks – Silver Lake – South El Monte – South Pasadena – Southgate – Studio City – Sun Valley – Temple City – Toluca Lake – Torrance – Valley Village – Van Nuys – Venice – West Covina – West Hollywood – Westchester – Whittier – Wilmington
MultiFamilyOWL.com is California’s #1 multifamily investment property website to search thousands of multifamily real estate listings for sale, for rent and for lease throughout Orange County, Los Angeles and San Diego California. Find large commercial apartment buildings, duplexes, triplexes and fourplexes with MultiFamilyOWL’s advanced residential income property search features. The multi-family listings include in-depth descriptions, operating financials and high resolution property photos to help you get an inside look. Stay informed with our blog and be notified of new California multi-family and multi-unit residential income property listings by following our social media accounts. Email us at contact@MultiFamilyOwl.com