Here are a few essential factors you should consider before doing a 1031 property exchange.
1- San Francisco boasts one of the most stable economies in the US
The rock-solid economy of San Francisco continues to surpass even the most optimistic projections. With a 2.9% unemployment rate, the city boasts one of the lowest unemployment rates across the country, and its GDP per capita quite recently exceeded the $100,000 mark. Moreover, the GDP of the city recorded a growth rate of 29% in the first half of the decade, making San Francisco one of the top 10 fastest growing economies in the US.
The city’s flourishing economy has positive implications for the San Francisco real estate market, as well. The continued economic growth, the low unemployment rate, and the high per capita income are the prominent hallmarks of an excellent location for real estate investment. Most importantly, these solid economic fundamentals are conducive to maintaining high rental property demand and a good return on investment.
2- San Francisco’s decent population growth rate
The population of a city is interlinked to its economic health. In San Francisco’s case, the tech industry still continues to attract people who are searching for better job prospects. In addition, this influx is expected to continue in proportion with the region’s ever-expanding tech sector. More importantly, this growth is expected to provide a great boost to the high demand for San Francisco rental properties.
It’s also fascinating to observe that despite reports of bay area residents fleeing the region en masse, the actual figures tell a different story. As a matter of fact, San Francisco’s population has grown at a rate of 9.52% since 2010. This rate is significantly higher than the national average of 5.96%.
If you’re convinced that San Fran is the ideal place to invest, start looking for a rental property right now.
3- A high appreciation rate of properties
Thanks to all the reasons discussed above, San Francisco has one of the highest appreciation rates in the California 1031 Exchange market. You would find it surprising that the latest data from NeighborhoodScout reveals that the appreciation rate is a little less than 10%. This puts the San Francisco real estate market in the fore-front of appreciating markets in the US. The best part is that all the variable factors that contribute to this appreciation continue to trend upwards. Therefore, the rate is expected to hover around its present level for the foreseeable future. This presents another strong reason to consider doing a 1031 exchange here.
4- San Francisco investment properties guarantee high rental income
This factor is very simple and straightforward for all the investors to understand. One of the main things to consider investing in the San Francisco real estate market is the high-profit potential that it offers to investors. In fact, the average rental income for conventional San Francisco investment properties is around $4,376, which is way above the national average. You should also keep in mind that this figure is a city-wide average. Investment properties that are located in the best neighbourhoods in San Francisco can generate an even higher rental income.
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The process of 1031 exchange in Delaware is extremely complex in nature. We at 1031xchange have expert advisors with extensive experience in handling highly profitable exchanges for our diverse client base.
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