Top Tips When Buying Investment Property in Chico

California is one of the hottest real estate markets in the United States. With a current population of over 39.1 million people, real estate investors can find vast opportunities to earn from the Golden State’s housing market. 

 

In fact, being one of the states with the best economy in the US, a lot of people are moving to California to find job opportunities. Because of its growing population, the California rental market is also thriving. Rental property owners in California enjoy high demands from renters. Additionally, because of its high demand, California has also one of the highest rental rates in the country. 

 

It’s important to note, however, that not all cities in the Golden State are optimal for rental property investments. If you are planning to invest in the California rental market, it’s crucial to choose your location carefully to ensure profitability. 

 

One of the best cities for investing in rental properties is Chico. In 2022, the population in Chico, CA is estimated at more than 100,000. With a median household income of $57,357, Chico is considered one of the most desirable California cities to live in.

 

Here are a few reasons why you should consider investing in the Chico rental market:

 

 

• Affordable Housing

 

In general, California is considered one of the most expensive housing markets in the country. However, the good news is that there are some cities in California that still offer affordable housing, and one of them is Chico. 

 

 

As a matter of fact, the median home value in Chico is $458,228. This is significantly lower than the state’s median home price of $834,400. This means that it’s still possible for new investors to find an investment property that they can afford.

 

 

• Steady Appreciation Rate

 

While the Chico real estate market still offers affordable housing options, real estate investors need not worry about the appreciation of their assets. This is because Chico enjoys a steady appreciation rate with an average of 4.53% per year. 

 

Why is this important, you ask? The home appreciation rate in a city determines whether or not it is a good location for investing. If you invest in a place with a steady or fast home appreciation rate, you can expect your property to substantially increase in value after a few years.

 

 

• High Demand

 

Among the 100,000-plus residents in Chico, 56% are renting a home. This means that more residents would rather rent than buy a property of their own, which opens more opportunities for rental property owners. In addition, since more people are moving to Chico, there will be a continued increase in demand for rentals.

 

 

• Rising Population

 

Chico is one of the most favorite destinations to live in. With its urban-like progress and a taste of rural lifestyle, there’s no wonder why a lot of people are migrating to this part of the Golden State. 

 

 

People love the affordable cost of living in Chico, making it a great place to raise a family. It is home to various prestigious schools. Plus, it offers state-of-the-art medical facilities and public safety.

 

The above-mentioned reasons are just a few of the important factors that make Chico real estate a hot market. If you want to take advantage of these benefits, it’s important to know how to buy the right investment property in Chico, CA. 

 

To ensure your profitability, make sure to keep the following tips in mind when investing in Chico real estate:

 

 

• Choose your location carefully.

 

Chico offers several beautiful neighborhoods. Before buying an investment property, make sure to choose your location carefully by studying the local market first. Some Chico neighborhoods have more expensive housing than others. 

 

Depending on your investment plans, it’s best to find a neighborhood that is suitable to your planned investment strategy. If you want to target high-end tenants, for instance, Chico real estate offers luxurious executive homes that are way cheaper than the home prices in the Bay Area. 

 

When choosing a neighborhood, it’s important to consider the safety of the area. Chico has a crime index score of 17, which means that some neighborhoods are safer than others.

 

There are established neighborhoods within walking distance of Bidwell park and downtown. You can also choose neighborhoods that are near business areas where most people go for work. 

 

 

In addition, you should also take into account the amenities in the area. For instance, investing in an energy-efficient and solar-powered neighborhood can help you save on costs in the long run. This can also attract more tenants.

 

 

• Conduct comparative analysis.

 

Before you decide on a particular neighborhood and investment property, make sure to conduct a comparative analysis. This provides you with an overview of how your rental home will perform. Also, it gives you an idea of which type of property is best in the area. 

 

In Chico, the most common type of property is single-family. Apartment complexes come in second. By comparing properties, you’ll be able to make an informed decision that can help you become a successful rental property owner.

 

 

• Set a budget and stick to it.

 

Once you have chosen a location, make sure to set a budget before choosing a property to buy. With a budget in place, you’ll avoid spending more than what you can pay for. Stick to your budget, especially when making renovations and home improvements.

 

While home improvements can add value to your rental home, you don’t want to go overboard with your expenditures. Avoid unnecessary improvement because this can affect your returns later on. When making renovations, stick to what is necessary and functional. Remember that this home is intended for rent, not for your own residence. 

 

Bottom Line

 

Chico, CA is a lucrative place to invest in rentals as long as you know what you are doing. If you’re in doubt, make sure to talk to a professional rental property manager to help you get started.

If you have questions about the Chico rental market, call or text IPM Property Management at (530) 924-4365, or email us at info@ipmchico.com.