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The Best Neighborhoods in San Francisco to Expand Your Investment Portfolio
August 6, 2021
Where to Buy Right Now
Acquiring new rental property is a great way to expand and even diversify your investment portfolio, and San Francisco is a unique market. Even with the twists and turns we have seen over the last year and a half with the COVID pandemic, the San Francisco rental market is still one of the best places in California to invest in real estate, especially over the long term.
San Francisco has the highest rents in the country, along with incredibly strong demand for apartments and well-maintained housing. Remote workers are coming back to the office, and they’re going to need a place to live.
San Francisco is attractive to local and out-of-state investors. Even international buyers look for opportunities here. If you’re not familiar with the city and its various neighborhoods, we’re talking today about where you should focus your search.
Remember:
the right property and the right neighborhood will depend on your unique investment goals. Make sure you know what those are.
PRO TIPS: Talk to a property manager
Your real estate agent will do a great job of showing properties and negotiating terms. Talk to a
San Francisco property manager before you buy. You’ll get an idea of how much rent you’ll earn, what kind of work needs to be done, and what types of tenants will be interested in your property.
1. INVESTOR-FRIENDLY NEIGHBORHOODS: POTRERO HILL AND PACIFIC HEIGHTS
Potrero Hill is found on San Francisco’s eastern edge. It has its own vibe, and the tenants in this area tend to be highly skilled and high earners. It’s residential but still close to some of the best opportunities in the Bay area for employment and entertainment. Rents tend to land between $4,000 and $5000 a month.
Pacific Heights is one of San Francisco’s most popular and lively neighborhoods. With panoramic views of the San Francisco Bay, the Golden Gate Bridge, and Alcatraz, tenants are always looking for homes in this area. A lot of Airbnb and short term rentals have begun showing up, and a long-term rental property will be well-received by eager tenants.
2. SOUTH BEACH, MISSION BAY, AND OTHER SOMA NEIGHBORHOODS
South of Market (SoMa) encompasses a lot of diverse and tenant-friendly neighborhoods such as South Beach, Mission Bay, and Rincon Hill. This area is located just south of Market Street. It’s a large but residential area in the city and always a trendy place to shop, eat, and live. There are some great cafés, bars, restaurants, and boutiques, making it a walkable and pleasant place to live. There’s been some new construction here, but most of the neighborhoods are residential and established, providing investors with opportunities for both multi-family and single-family homes.
3. WHAT TO LOOK FOR IN ANY SAN FRANCISCO NEIGHBORHOOD
Maybe you already have a neighborhood in mind. Wherever your desired investment property happens to be, make sure you’re taking an objective, data-driven approach to your acquisition. You’ll want to see a strong demand from tenants and great proximity to schools, shopping, and commuter routes. Parking always makes a big difference. Public transportation helps.
Rental values are also an important part of your decision. While prices in San Francisco are always driven up thanks to the strong tech presence in the city, there’s also an additional benefit to buyers right now in low interest rates. There’s a lot to know about renting a property in San Francisco, such as rent control and just cause eviction laws and restrictive building codes. Educate yourself before you buy in any neighborhood.
How does the market look?
The global pandemic slowed down demand for real estate in San Francisco and other competitive and expensive cities. However, the demand is coming back. Buy now before it becomes remarkably expensive again.
SAN FRANCISCO PROPERTY MANAGEMENT CAN KEEP YOU COMPLIANT
At BanCal Property Management, we’ve been helping investors choose the best possible rental homes since 1987. We are here to help you make the most of your investment experience.
Author - Tammy McNaught
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