What Makes for a Good Rental Property in San Mateo, CA?
Does San Mateo, CA rental property align with your investment strategy? Learn more about what makes this area attractive to investors and residents, how to determine what rent to set, and what laws apply to your property in this area.
When deciding if San Mateo, CA is the right place to purchase a rental property, what should you be looking for in a real estate investment? You want base your decision on data like the average rent for the area, time on market, and average home prices.
Some areas would only offer an investor appreciation, so running the numbers before your purchase is critical to making a smart decision. Is there going to be negative or positive cash flow? What kind of appreciation can you expect? These numbers should provide you realistic expectations based on the current market and expected growth.
About San Mateo, CA
San Mateo is a suburb of San Francisco located in the heart of Silicon Valley that offers an urban suburb feel that attracts young professionals and families. Most people in the area work in the following industries: professional technology, education, health, and arts/entertainment. Features of a location can be essential for maximizing value.
Characteristics and walk scores
- Walk score of 65/100, public transportation 40/100, and deemed moderately bike-able at 65/100
- Known for great schools. Most are ranked 10/10.
- The city has an A+ grade from niche.com for public schools, good for families, nightlife, and diversity
- Ranked 4 years in a row in the top 100 Best Places to Live (Small to mid-sized cities in the U.S.).
Resident and job growth
San Mateo’s economy centers around technology as it is located minutes away from the headquarters of Google. It also has other industries, and 2 of its biggest employers are Franklin Templeton Investments and San Mateo Medical Center.
City trends in the housing market
- Many homes get multiple offers, some with waived contingencies.
- Homes sell for around list price and go pending in around 18 days.
- Hot Homes can sell for about 2% above list price and go pending in around 7 days.
If you are looking to buy in the San Mateo, CA area, you must be prepared to act quickly because homes are sold within 7-18 days and go for 2%above the listing price. Because these properties are expensive ($1,400,000 average) relative to what they can rent for, about 40%of the homes are renter occupied.
Home prices in San Mateo
- Average home price is around $1,400,000
- Up about 2% from last year
- The median list price per square foot in San Mateo is $861, which is higher than the San Francisco-Oakland-Hayward Metro average of $499.
Because of the high price of real estate in the area, you are probably going to make more in appreciation than cash flow. That is fine if it aligns with your goal.
Can you sustain a vacant property?
Higher priced property that sits vacant can cost you a lot in lost rent income. You will need to know that you have enough capital to sustain a vacant property. Typically, rentals don’t stay on the market long (18-24 days) in San Mateo, but plan for 30+ days.
Renters vs Owners
- 41% of the homes are renter occupied
- 58% of the homes are owner occupied
Because house prices are so high, many people can’t afford to buy a property, so it is easier for them to rent. This might explain the higher percentage of renters, and you can expect more renters will be cycling through the properties more often.
- 56% are 4-6 bedroom homes
- 27% are 2-3 bedroom homes
Get a property that people are looking for
Buying a 1 bedroom 1 bath home in this area probably isn’t a good investment.Based on the number of homes that are larger, renters are less likely to be looking for a 1 bedroom home. Not taking that in consideration could leave you with a property you can’t rent quickly today and one you can’t easily sell in the future.
- Hillsdale $4,698
- Northwest Heights $4,225
- Marina Lagoon $4,200
Selecting a property in a popular neighborhood might help it rent faster and rent for more, so that is worth considering when shopping for a rental property to buy.
An experienced San Mateo property manager can run the current numbers to see if investing in the area fits your goals and needs as an investor. If it turns out San Mateo isn’t a good fit for you, Mynd manages in 19 markets nationwide. We combine the data from external sites with all our proprietary data of actual rents from 8000 units under management which allows us to help you find a market that works best with your strategy.
How to accurately set rent for my San Mateo, CA rental property
It is important to set your rent for the current market
Just because your property rented for a certain amount in the past doesn’t mean that it will rent for that price today. That could mean an increase or a decrease, but the rent should reflect what the current market demand allows.
Average rents and days on market in San Mateo
- 3 BED 2 BATH single family home average rent is around $4,600
- Days on market on average 18 days to 24 day
Average rents for apartments, single family homes, duplexes will be different. If you have a 5 bedroom home at a higher price point, and you can expect to have a longer days on market. Plan for that.
Real estate is cyclical
There might be better times of the year to rent your property (typically Spring/Summer). Prices can fluctuate based on the current economy and demand vs supply in the area.
When determining rent, you want to base your price on accurate, current data. The rent prices you see on sites like Zillow and Craigslist may not be the most accurate as they may not reflect the actual rent amount on the finalized lease. The owner may have been overshooting or undershooting it, so don’t use those numbers to base your decision on. Things like utilities may or may not be included which would also affect the price.
It is best to consult your San Mateo property manager who can give you more accurate data on how long you can expect to have the property on the market and what rent you can expect to receive. Mynd offers a Free Rental Analysis that will help you determine what you can expect from your property.
Why should I hire a property management company in SanMateo, CA
Why would you look at hiring a San Mateo property management company like Mynd?
They are going to take care of the day to day care of the property such as:
- Leasing the property
- Marketing the property
- Finding a qualified resident
- Lease signing process, enforcement, and renewals
- Handle maintenance issues
- Ensure the property is being properly maintained that complies with the laws
- Offer superior customer service to reduce vacancies
A property management company like Mynd puts the operational business model in your property to make sure that you are successful,your resident is safe, and all laws are being complied with.
Typical maintenance issues homeowners have in the area include
- Seasonal maintenance
- Plumbing issues
- Energy efficient device installations
- Winterizing and weatherizing
Kitchens are a big selling point when a renter views a property. When they are paying a lot of money, they are looking for kitchens that are well-maintained and modern.
Know the laws and regulations that apply to landlords or have a property manager handle this for you
There are a lot of laws, especially in California, that protect tenants’ rights as well as a long list of local, state, and federal laws, rules,and regulations. This includes things like:
- Section 8 housing voucher program
- Landlord incentive programs
- HACSM’s Tiered subsidy program
- Covid-19 Evictions and regulations specific to SAN Mateo county
The County of San Mateo Department of Housing has an entire Landlord/Tenant guide and handbook of rules to follow,
You can try to research all these regulations yourself or hire a San Mateo property manager to handle that for you. At Mynd, we offer a three-tiered pricing system for our management services so you can pick the level that fits your needs.
Mynd also has a full legal counsel on staff to look out for your best interests and to keep up with the ever-changing laws. This is especially important during COVID-19 where even more laws and rules apply to landlords.
Hire a San Mateo Property Manager
Mynd property management is ready to be your strategic partner. If you are looking for investment property to buy or property management in San Mateo, we are here to help you succeed. We offer a FREE rental analysis of your current rental property, so give us a call today.
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In the meantime, learn more about ways to start with a smaller downpayment here.