Los Angeles has been recognized as the city with the most real estate investment opportunities, according to the Schroders Global Cities Index. Renting or buying a home in the South Bay region is perceived to be a major opportunity both in the short and long-term.
This index is built on a series of factors, including disposable income, GDP growth, retail sales, and population. The latest version of the index takes into account, in addition, an additional factor that is the presence of leading universities. The inclusion of this feature has been key and differentiating since, in the opinion of Schroders, these universities are a focus of attractive talent for companies.
Los Angeles has placed first in the ranking, jumping from sixth place, and narrowly overtaking London, which ranks second in this ranking.
There are several reasons to believe that there are real estate investment opportunities in this city. First, Los Angeles is the second most populous city in the United States. and one of the most diversified economies of the country, which makes it an attractive place to live and work.
In this sense, multiple industries, including financial services, media, commerce, and technology, coexist in the same location. The technology sector, in particular, has grown substantially in recent years in Los Angeles, and this has not only boosted the demand for office space by companies such as Netflix, Amazon or Google but has also increased interest in residential property, largely due to the increase in the recruitment of "millennials."
Finally, the fact that there is a limited urban supply and that there are many people interested in moving to this global city is another of the key factors that make Los Angeles the most attractive city to invest in real estate.
The urbanization is a mega long-term trend expected to continue till 2030. 75% of the world’s population (which will reach 8.5 billion people according to estimates by the United Nations) will live in cities.
This does not mean that it is possible to obtain returns if we invest in a general way in the real estate market since there will be some cities that will become leaders and others that will take a back seat. It is important to bet on cities that, like Los Angeles, become centers of growth, generation of employment and innovation, as well as cultural leaders and quality of life for their inhabitants. Because these cities will be those that will have broad competitive advantages and, therefore, will be a good investment opportunity.
Investing directly in real estate requires a large initial investment and has little liquidity. Many properties or certain areas or cities are out of reach of our pockets and, in the case of investing in them, could have such a large weight in our portfolios that they would pose an excessive risk to them. Generally, real estate investors have a lot of exposure to their local markets, and as with any type of investment, diversification is essential.
Considering this context, an interesting option when investing in real estate is to do it through investment funds that invest in listed companies that are dedicated or indirectly benefit from the growth of the real estate sector and, specifically, that operate in these cities with such good growth prospects called "global cities." This type of investment has very low entry minimums compared to direct investment in real estate, has daily liquidity and offers a high geographical diversification so it can open the doors to many investors interested in this sector.
If you are looking to buy a home in South Bay, then contact Casa Bella properties today. We can help you find a home that will maximize your returns and provide you the highest ROI.