Why Invest in San Jose?
There are many benefits of investing in local real estate opportunities.
San Jose is an excellent investment destination for Bay Area investors
because its proximity and the high rate of appreciation.
According to the stats presented by Norada Real Estate Investment, San
Jose real estate appreciated 50.54% over the last ten years. The
average annual home appreciation rate nationwide is 4.18%, putting San
Jose in the top 10% nationally for real estate appreciation. If you are
a homebuyer or real estate investor, San Jose definitely has a track
record of being one of the best long term real estate investments in
America in the last decade.
The rate of appreciation is so strong in San Jose that despite a
nationwide downturn in the housing market, San Jose real estate has
continued to appreciate in value faster than most communities. Looking
at just the last twelve months, San Jose appreciation rates have
continued to be some of the highest in America, at 11.27%, which is
higher than appreciation rates in 97.5% of cities and towns in US.
Short-term real estate investors have found good fortune in San Jose in
the last twelve months as well.San Jose appreciation rate in the
latest quarter was 4.09%, which equates to an annual appreciation rate
Investing in the specific San Jose properties using the profit
participation approach can offer higher gains, as shown in the following
A four unit property was purchased in San Jose at the end of 2017 for
the purpose of flipping for $770K. The flipper used $335K (or 50% of
the value) from a profit participation investor. After remodeling, the
flipper sold the home for $1.3M in the beginning of 2018. The
investor’s share was $650K (a $325K return on $335K investment, or a
97% cash on cash gain.) In first 1 year of operations, (January 31,
2019) the property’s Gross Rent Multiplier (GRM) = 12 (using the
purchase price) and the Capitalization (CAP) ratio = 7. With $96,000 in
income per year, the property is excellent to hold, but can be easily
sold for a profit (again) because of its low GRM and high CAP.
There are many similar investment opportunities in San Jose.