Investing in real estate in Los Angeles, California, is a complicated step, whether you’re looking to live there or make a rental investment. When buying real estate in Los Angeles, there are many details to know.
Real estate agents, bank loans, and purchasing steps: in this article, we cover everything you need to know about real estate investment in Los Angeles.
Knowing the Specifics of Real Estate in Los Angeles
In the real estate jargon in Los Angeles, the term “MLS” often appears: it means “Multiple Listing System.” It is a common system where all the mandates of properties for sale are shared.
This means that all available properties are centralized and visible on the Internet. It is, therefore, possible to see all the properties on the market at a glance.
Good to know: access to this site is completely free, so don’t trust people who ask you to pay.
Choosing a Real Estate Agent in Los Angeles
When investing in real estate in Los Angeles, it is essential to choose your real estate agent carefully. Indeed, it is the agent who will be able to quickly propose properties that have recently become available on the market.
Going through a real estate agent is generally the best way to get a good deal or to find an exceptional property.
The Best Real Estate Agencies in Los Angeles
Among the plethora of real estate agencies in Los Angeles, some are particularly well known. Among these, we can mention:
- Century 21 Hollywood: this well-known brand has an agency near the Pasadena district
- Sotheby’s International Realty: this reputable agency negotiates luxury real estate
- Michael Moore Rodeo Realty has chic properties throughout Los Angeles.
How to Finance a Property in Los Angeles?
There are two options for financing a property.
1. Paying Cash
It is possible to finance your California real estate by paying cash.
This is not the most common option, as you need to be able to pay the full amount of the property at once.
2. Apply for Financing
You can also use a loan to finance your property. In general, credit applications take between 45 and 60 days in California: this is the time needed for the bank to make checks before accepting them.
Before you apply for a loan, you can make an appointment with the bank to see how much you can borrow in order to be “pre-approved.” This saves you from waiting to find a property before applying for financing.
What are the Costs of Investing in Real Estate in Los Angeles, California?
In addition to the property itself, there are several other costs to consider when buying a property in Los Angeles.
First of all, it is strongly recommended that you take out registration insurance. This will protect you in case of error during the administrative formalities.
Among the expenses to be foreseen are:
- Bank fees: the bank’s fees are between 1 and 3% of the credit, and the file fees vary between $20 and $400
- Insurance: title insurance costs about 0.7% of the purchase price of the property. In the case of a home purchase, comprehensive insurance requires 14 months of insurance to be paid upfront. When buying an apartment, at least two months of condominium fees must be paid in advance,
- Property taxes must be paid two to ten months in advance
- Additional inspections (optional): approximately $350.
Finally, the closing of the sale, called “closing,” is done by a closing agent whose fees differ if it is a cash or financed purchase.
In the first case, the buyer will have to pay $1,500. In the second case, he will have to pay 2% of the purchase price.
Best Places to Invest in Real Estate in California: Los Angeles Neighborhoods
Los Angeles is a huge city where living conditions differ greatly from one neighborhood to another. The average price per square foot is $9,150.
This neighborhood is considered the center of Los Angeles. Downtown is located between the ghettos and the upscale neighborhoods and contains many bars, restaurants, and shops. The area is very well served by transportation.
This very touristy area is the most famous in the city. Because of its many world-famous attractions, Hollywood is an ideal area to invest in, as millions of tourists flock here every year. It is, therefore, very easy to rent an apartment in Hollywood.
Located in the suburbs, this neighborhood is accessible in only thirty minutes by public transportation. It is a very pleasant area where modernity and history mix.
Pasadena is appreciated by families because it is served by a train station and by the highway and offers a less urban environment than the center of the city of angels.
This posh neighborhood is very popular and expensive. It is, in fact, a city in its own right, with 80% of its inhabitants being homeowners. Buying in Santa Monica is, therefore, a good idea for living there, but it is not the ideal neighborhood for rental investment.
Find out the average prices per square meter for these neighborhoods:
Investing in Real Estate in Los Angeles: Final Word
Living in California is a dream for many people: the climate, the living environment, and the nearby ocean attract more and more expatriates.
To secure your real estate investment in Los Angeles suits you best, do not hesitate to be accompanied by professionals who will guide you.