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Is It A Good Time To Purchase Investment Property in Silicon Valley?

 
Is This Is A Good Time To Purchase Investment Real Estate in The Silicon Valley?
 
YES!!!!!!
 
Next question? But seriously.
 
I previously talked about the effect of increased interest rates on Silicon Valley Real Estate.  For my analysis of that situation please click here.
 
The upshot is that higher the interest rates will decrease prices, but maybe not in proportion to the cost of ownership, especially in higher priced/more popular areas of Silicon Valley.
 
This will keep the affordability of home ownership out of reach of many Silicon Valley residents. That means there will be a greater number of potential renters in the area which is good news for real estate investors.
 
Currently, the CAP rate on rental real estate has not been great, especially in high end properties. It is not uncommon to see 2% cap rates in multi- family homes in Palo Alto or Mountain View. The value was in appreciation.
 
No one is predicting much appreciation in this market in the next year or two, and rents are already ridiculously high. I am not convinced they are going to increase much in the next 2 years either.
 
Where I see opportunity in the Silicon Valley real estate investment market is in areas near the tech expansion ... more

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