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Why Sacramento Is Such an Enticing Market for Investors

Mynd Knowledge Center

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Choosing a market in which to invest is one of the most important decisions an investor can make. Today we are speaking with Dan Hines, Regional Director with Mynd Property Management. Dan is here to discuss the many reasons why Sacramento is such an enticing market for new and established investors, alike.Steve Rozenberg: Ladies and gentlemen, I am Steve Rozenberg and I am joined here with Dan Hines, Regional Director for Mynd Property Management in Sacramento. Dan, thanks for joining me today. I appreciate it.Dan Hines: Yeah, thanks for having me on.Steve Rozenberg: So this is something that a lot of people ask me about, and when they want to know about California, Sacramento is kind of that sleepy town, but it's also a place that a lot of investors are at, and there's a lot of people buying properties. If you were to give some opinions on why you think Sacramento is a good place for investors to purchase, what would you say are some of the reasons why, in your opinion, it is a good place to buy property?Dan Hines: Yeah. So first, the sleepy town comment. Right? For a long time-Steve Rozenberg: Is it still a sleepy town? I guess that's the first question.Dan Hines: No. So we’ve got that reputation. It's a government town. The capital's here.Steve Rozenberg: Yeah.Dan Hines: A lot of people only knew Sacramento because they would pass through it on the way to Tahoe or the Bay or vice versa. Right?Steve Rozenberg: Yeah.Dan Hines: But so much has been going on out here. The city is booming. Massive revitalization. A ton of energy. We just recently were awarded a bid—we will be the next MLS expansion team. There's a ton of things going on here.Steve Rozenberg: Nice!Dan Hines: So without going too far into the data, Sacramento, over the last handful of years has also led the nation, either the top one, two or three spots, in terms of annual rent written growth year over year. And then the vacancy rates are super, super low, also.So you have this sort of urban core. A bunch of new construction, cranes in the sky, sports teams, a lot of new buzz, arts, restaurants. You also have a massive wave of people coming in from the Bay area, because Sacramento is still much more affordable than many other places in California.And there's just a lot of excitement around the city. So I would say, depending on what your goals are as an investor; are you an appreciation investor? Are you a cashflow investor? Are you ... You know?You have to still ask yourself those types of questions about what do you want make sense, but Sacramento as a location, I think it's phenomenal. We've seen several years of a very healthy rental market.Steve Rozenberg: Well, and to me, the things that I like about Sacramento is number one, you've got all the government facilities there, so it's stable because the government's there, the Capitol, that's number one. Number two, it's kind of a, I don't want to say secondary city, but it's like you had said, it's an off-flow from San Francisco. So you're always going to get people coming from the Bay Area. We'll say Bay Area because of the price point difference, which is always going to make it an inbound flow city, is what they call it. And again, you've got rents going up, you've got a lot of good indicators that, if I was out-of-state or out-of-country, if the Bay Area was just out of my realm and I could not afford the price points of those properties to buy multiples, Sacramento is a fantastic market because you get everything from the Bay area—the technology, you get all that stuff. But also you get the government stability, which I always think, when I'm looking at a city to invest in, I'm looking for multiple drivers. I don't want to rely on just one thing like tech or one type of industry.And that's the nice thing about Sacramento is you've got a cross thing and you've got universities there. So you've got school, you've got a lot of things that people don't realize when it comes to Sacramento. And as you said, it's growing, which is great because that just keeps prices going up and up. And we'll do another session of kind of what are some price points there. But, so if you were an investor, would you say ... When is the right time to buy? Is it now? Is it summertime? Is it ... I know they always say the best time to plant a tree is yesterday, same time of buying a rental property. But if you were to give someone advice and they were thinking of jumping into the Sacramento market as an investor, what would you say?Dan Hines: Still run your analysis. You have to do the diligence on the deal. You have to understand the economics behind the deal. But in terms of where we are in the life cycle of Sacramento as a city, I think it's a great time to buy. I think Sacramento still has a ton of upside. There's a lot of growth. Sacramento, for a long time, it was never on the list of up and coming anything or cool things or ... You know? And I'm essentially native. I've been here pretty much my entire life and I've loved Sacramento.So I feel like it was my little secret that I was keeping, and now it's not really much of a secret anymore. And it's cool because it's great for the city, but it also means that so many things are changing. So many new things are coming in. We have an Amazon fulfillment center and tech companies are coming in. But if you're trying to find a city that is still blossoming and becoming something, Sacramento currently is. It definitely fits that.Steve Rozenberg: That's great. That's great. Well if they do want to get ahold of you and learn more about Sacramento and possibly buying some investment properties and have you guys manage, how would they do that? How would they get ahold of you?Dan Hines: Yeah, go to our website. It's mynd.co. So M-Y-N-D, .co. You can find us there. And then you're also running our Mastermynd Facebook page.Steve Rozenberg: That's correct. We have a group on Facebook, so you can reach out to us on social media. We obviously have our Mynd Facebook page, and then we also have our Mynd Mastermynd, M-Y-N-D, a real estate investment club. And actually, in there, there's a lot of investors—quite a few in the Bay area, Sacramento, and we actually analyze deals, as well. So we've got a couple of deals in there that we've analyzed in the Sacramento area using investment software and trying to assess hot deals, hot properties, what does and does not signify deals. So join the group. You'll be able to engage, converse, and discuss real time investment issues, strategies, et cetera.So Dan, again, thank you again for all your knowledge. I appreciate it. Everybody, this is Steve Rozenberg and Dan Hines. I want to thank everyone for watching and we'll talk to you later. Bye-bye.Dan Hines: Thanks, guys.With its proximity to the Bay Area and a stable and growing economy, Sacramento is a great market for any investor to consider. While it enjoys many economic benefits from its proximity to the Bay Area, Sacramento also boasts a stable economy given the frequency of government jobs within the area.Likewise, Sacramento is a great city for new investors as many properties come at a lower price point than most other metropolitan areas in California. This is particularly true when compared to the Bay Area. As such, investors in Sacramento enjoy many of the benefits of the Bay Area’s economy with greater stability and a lower barrier of entry.

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