If you are a newcomer to Santa Barbara real estate investing, finding your first income-generating property can seem like a fairly daunting task. How can you be sure that a property will generate enough cash flow? How will you estimate your costs to put potential homes for rent into the profit column? Altogether, how will you know when you find the right opportunity in Santa Barbara or Montecito?
First, you have to view the competitive landscape in Santa Barbara this Spring, which means doing some targeted research. You should start by gathering Santa Barbara Real Estate economic trends that will serve as a guide. You will also want to call one or two reputable Santa Barbara property management companies to get a general idea of the costs you should expect when listing homes for rent with their firms.
In today’s market, the demand for quality homes for rent and the rents they command are generally up. Given an increased demand for Santa Barbara rental properties, it is reasonable to predict that even as a new investor you should be able to find qualified potential tenants within a reasonable timeframe. However, the tenant qualification process can be tricky. It is peppered with legal and Fair Housing rules, so you should be prepared to either educate yourself thoroughly on the laws or hire a professional property manager or leasing agent to handle this aspect.
Overall, the market in homes for rent has trended higher, but your new business will prosper or not based on the cash flow for the property type you choose to enter. Many neophyte Santa Barbara real estate investors consider beginning with a condominium, and for practical reasons. Homes for rent can bring with them a multiplicity of unique –sometimes unexpected-- problems, whereas most condos come with HOAs that handle roof, exterior maintenance, and even many more problem-preventing features, assuming they have adequate reserves.
Having the right Santa Barbara real estate agent to help you find prospective properties and to furnish professional advice along the way is crucial. Please feel free to call us anytime for market advice if you have ever considered looking into the Santa Barbara real estate market.