THE RENTAL RADAR
WHERE TO INVEST NEXT
ECHO PARK, CA
I nvestors write off Los Angeles because they see rent control and stop reading. That’s a mistake. In a neighborhood like Echo Park, where most of the stock predates the October 1978 rent stabilization cutoff, the opportunity isn’t in raising rents on existing tenants. That isn’t legal, and it isn’t the point. A one-bedroom renting for $1,140 might lease for around $2,200 if it became vacant. That gap between in-place rent and market rent is called loss-to- lease, and it can matter more over time than the cap rate. It’s that a four-year rent freeze and a 3% annual cap have left a real gap between in-place rents and market rents. Every unit that turns over closes part of that gap on its own. When a tenant moves out voluntarily, California law allows the owner to set a new market rent for the next tenant. Buy at a basis that pencils today and let time and normal turnover do the work. Los Angeles isn’t the easy trade it was ten years ago. It still rewards patient owners. Click here to read Taylor’s full breakdown.
TAYLOR AVAKIAN Founder at The Group CRE A Los Angeles multifamily brokerage Connect with Taylor
Let’s take a look at some other fun facts about Echo Park, CA
Median Single Family Home $ 1.13M (vs $440k nationwide)
Median household income $87K
of residents are renters 75%
Average home was built in 1955
Population 33K
$2,575 Average 1-bedroom rental
Vacancy rate 7.3% (vs 10% nationwide)
(vs $1,664 nationwide)
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