As a real estate investor, you need to be constantly on the lookout for the best investment opportunities in any given area. Over the years, Merced, CA has proven itself to be a viable location for real estate investment, especially if you’re interested in residential rental properties.
Why is Merced such an ideal target market for investors? Whether you’re thinking about your first investment property or building a profitable and powerful portfolio, this is a good place to put your money. Located in the heart of California's Central Valley, Merced boasts a small-town charm coupled with an
array of amenities that make it an attractive location for both permanent residents and visiting tourists. There’s money to be made if you’re renting out a long-term home or a short-term vacation home.
As you begin to seriously consider
investing in Merced real estate, it's vital to understand the current real estate market trends in the area. We’ve been working with investors and rental property owners for years, and we know the local market well. Sharing resources and knowledge is important to us, so we’re taking a deep dive into the current real estate market trends in Merced, CA, for investment properties.
Here’s what you need to know.
Merced, California has a strong and stable real estate market, which has proved resilient and competitive even in the face of economic downturns. According to Realtor.com, the median price for a Merced home in October of 2023 was $416,000, which is an increase of 4.3% year over year.
The Merced housing market has managed to remain a seller's market with limited inventory levels, housing units typically receiving multiple offers, and sellers accepting offers over asking price.
The draw is that buyers are finding a well-located community with price points that are significantly lower than other cities and communities throughout California. Merced prices are not nearly the same as San Francisco or Los Angeles prices. That contributes to the desirability of this market and the willingness of investors to compete for the best available properties.
What can you expect to buy when you’re looking for real estate in Merced?
Investors can choose from a wide range of investment properties in the area, including single-family homes, multi-family units, condos, and small or mid-sized apartment buildings. There’s plenty of commercial space available too, if you’re looking to diversify your portfolio.
You’ll find that single-family homes are the most common type of investment property in Merced, and these properties have experienced steady appreciation over the years. Multi-family homes, on the other hand, provide steady cash flow, as they generate rental income from multiple units right away.
Depending on your own unique investment goals and your future investment plans, you can find something that sets the foundation for consistent and recurring rents as well as long term appreciation as your tenants pay down your debt and contribute to the equity you earn in your investment.
The real estate trend that’s most beneficial to investors is the demand for well-maintained rental homes in desirable neighborhoods.
Merced has a growing demand for rental properties, and the residents looking for homes tend to be well-qualified. The demand for rental properties has been on an upward trend, fueled by an increasing population and the growth of major employers in the area such as the University of California Merced, Merced College, and Mercy Medical Center. There has been a lot of talk about people relocating out of expensive coastal cities and into smaller cities that offer similar amenities but a higher quality of life and a lower cost of living. That’s Merced. The popularity of
remote working has only helped increase population in cities like ours. If people can work from anywhere, they’d rather live in a place like Merced.
The growing demand for rental properties has pushed rental values higher. That’s a trend that investors love to see. According to Zillow, the median rent across all property types is $1,800.
What does this mean for you and your current portfolio? What do these trends mean for your investment goals going forward?
That requires an in-depth conversation, which we’re happy to have with you.
What we can tell you on a more general level is that investors in Merced are smart to employ various investment strategies that suit their investment goals and risk tolerance. We almost always recommend that you buy and hold properties, and rent them out to reliable long-term tenants. You can also put together a strategy for short-term vacation properties. There’s more work involved, and less certainty around what you’ll earn, but your per-night earnings will be high.
The market is going to continue performing in a way that’s ideal for real estate investors, whether you’re local to the area or investing from outside of Merced. As long as you have a solid set of investment goals in place, you know what your budget is and you’re disciplined about sticking to it, and you surround yourself with experts in real estate and
Merced property management, you’re setting yourself up for success.
Merced, CA, presents an attractive real estate investment market with plenty of opportunity for all sorts of investors. We’re grateful for our thriving real estate market, and we’re excited about the growing demand for rental properties.
Investors can choose from various investment options, and the current real estate market trends for investment properties in Merced indicate a highly competitive market with increasing home values and higher rents.
What are the next steps? As an investor, you’ll want to conduct a thorough market analysis, enlist the help of a real estate agent and property manager, and choose the right investment strategy to maximize your returns.
We are here to help you navigate the market and the process. If you need help, please contact us at Wisdom Property Management & Realty, Inc. We lease, manage, and maintain investment properties in Merced, Atwater, Livingston, Winton, and Delhi.
