It’s easy to see why the City of Angels is constantly growing. For starters, if you’re looking to work in virtually any area of showbiz, Los Angeles is the place to be. Even those of us who don’t have dreams of stardom are drawn to L.A.’s one-of-a-kind local culture and multitude of intriguing job opportunities. Furthermore, as one of the most populous cities in the country, Los Angeles has ample demand for housing, making it a profitable area for real estate investors. Anyone looking to invest in an L.A. rental property would do well to consider the following factors before moving forward with any deals.


Unlike sprawling metropolises that are built around public transit, Los Angeles was largely designed with cars in mind. As such, the city is home to the sixth worst traffic conditions in the country. In fact, depending on what part of the city you live in, simply making a trip to the grocery store may take several hours. 

Given how hard it can be for Angelinos to get from Point A to Point B, many L.A. residents seek out residences that are located in close proximity to grocery stores, shopping centers and other necessary centers of commerce. The closer essential businesses are to one’s home, the less time they’re likely to spend stuck in traffic. 

So, when searching for potential investment opportunities in Los Angeles, make sure to take the location into careful consideration. Even if a property has been meticulously maintained and has copious amenities to offer, many renters are liable to be turned off if it’s located in an out-of-the-way area that’s a fait distance from the businesses they frequent.  

Area Rental Rates 

Before making an offer on a rental property, you should do some research into the area of the city in which it’s located. When conducting your research, take care to pay special attention to local rental rates. If properties that are similar to the one that’s caught your interest are unable to command your desired rent prices, you may need to set your sights on properties in other areas. 

As anyone who’s owned rental properties in Los Angeles can attest, rent prices can vary wildly depending on the part of the city you’re looking to invest in. So, before getting started on any paperwork, make sure to familiarize yourself with area rental rates. Additionally, familiarizing yourself with various parts of the city can help you better understand the Los Angeles real estate market forecast.    

Overall Condition of the Property 

Many of the rental properties you look at are going to require repairs and/or renovations. In some cases, such work is necessary to make the property habitable. Other times, repairs/renovations are done to make properties more modern and broaden their appeal. Suffice it to say, not all work of this nature is equally pressing. Whereas some properties will only require minor improvements, others will need to be completely renovated. 

That being the case, it pays to know what you’re getting into before committing to invest in a rental property. In addition to doing a detailed walkthrough of every property that strikes your interest, make sure to insist on pre-purchase inspections. Certified inspectors will be able to identify an extensive array of problems and provide you with the knowledge you’ll need to make an informed decision. Their findings may even serve to strengthen your bargaining position. So, no matter how much a seller pushes back against having their property professionally inspected, make it clear that in the absence of an inspection, there is no sale.   

Monthly Management Costs 

Some rentals aren’t cheap to maintain, especially large apartment buildings and condo complexes. Depending on how many units a property houses, management costs can easily eat up thousands per month. So, before purchasing a rental property, take care to calculate how much you’ll be spending on maintenance, upkeep and other managerial costs each month. You may discover that being able to afford a certain property doesn’t mean you can afford to maintain it. 

As one of the most populous cities in the U.S., Los Angeles is home to millions of residents and regularly receives a steady number of new arrivals. That being the case, demand for housing in L.A. has remained consistently high. So, if you’re thinking about investing in a Los Angeles-based rental property, there’s a good chance you’ll be able to turn a considerable profit. To help ensure that success of any L.A. rental property ventures, take the factors outlined above into careful consideration.  

By Eddy

Eddy is the editorial columnist in Business Fundas, and oversees partner relationships. He posts articles of partners on various topics related to strategy, marketing, supply chain, technology management, social media, e-business, finance, economics and operations management. The articles posted are copyrighted under a Creative Commons unported license 4.0. To contact him, please direct your emails to [email protected].