Palm Springs is a popular resort city in California, known for its sunny weather, golf courses, spas, and mid-century modern architecture. But did you know that Palm Springs is also a great place to invest in real estate? Here are some reasons why investors should consider Palm Springs as their next destination.
High demand and low supply
Palm Springs has a high demand for housing, especially from tourists, retirees, and remote workers who are looking for a relaxing and affordable lifestyle. As of October 2023, Palm Springs has a median home value of $532,500, which is an increase of 19.4% from the previous year. The median rent price in the area is $2,500, which is higher than the national average of $1,650. However, the number of homes available for sale is low, with only slightly above 381 homes on the market. This creates a favorable environment for investors who can buy properties at a low price and sell or rent them at a higher value.
Strong rental market
Palm Springs has a strong rental market, as it attracts millions of visitors every year who are looking for short-term or long-term rentals. The average daily rate for an Airbnb rental in Palm Springs is $314, which is higher than the national average of $160. The occupancy rate is 72%, which is also higher than the national average of 64%. The monthly revenue per available rental is $6,768, which is more than double the national average of $3,100. These numbers show that investors can generate a steady and high income from renting out their properties in Palm Springs.
Tax benefits and incentives
Palm Springs offers some tax benefits and incentives for investors who want to buy or renovate properties in the city. For example, Palm Springs has no city transfer tax, which means that buyers and sellers do not have to pay any extra fees when they close a deal. Palm Springs also has a “Historic Site Preservation Board” that grants tax credits and exemptions for owners who restore or maintain historic properties in the city. These tax benefits and incentives can help investors save money and increase their returns on investment.
Proximity to Major Cities
Palm Springs’ strategic location places it within a short distance of major metropolitan areas, such as Los Angeles and San Diego. This accessibility makes Palm Springs an ideal choice for investors seeking a second home or vacation property within a reasonable distance from major urban centers.
Future growth potential
Palm Springs has a lot of future growth potential, as it continues to attract more people and businesses to the city. For example, Palm Springs is home to the Palm Springs International Airport, which is one of the fastest-growing airports in the country, serving over 2.6 million passengers in 2022. The airport is undergoing a $100 million expansion project that will add new gates, parking spaces, and amenities by 2025. Palm Springs is also home to the Agua Caliente Band of Cahuilla Indians, which is one of the largest and wealthiest Native American tribes in the country, owning over 31,000 acres of land in the city. The tribe is developing several projects in the city, such as a new cultural center, a sports arena, and a casino resort. These projects will create more jobs, tourism, and revenue for the city.
In conclusion, Palm Springs is a great place to invest in real estate, as it offers high demand and low supply, strong rental market, tax benefits and incentives, Proximity to Major Cities and future growth potential. Investors who are looking for a profitable and stable investment opportunity should consider Palm Springs as their next destination.