Mid-City Los Angeles is a highly desirable neighborhood, centrally located with lots of amenities. But is Mid-City a good place to invest in real estate? Or are the property values too high to leave enough of a profit margin?
In this article, we’re evaluating local market trends and explaining what they mean for investors. We’ll help you decide if Mid-City is a good place to invest in real estate.
Overview of Mid-City, Los Angeles
As the name implies, Mid-City is centrally located in the heart of LA. Bordered by the 10 to the South, and Olympic to the North, you’ll find most of Mid-City situated between Hoover to the East and La Cienega to the West.
Only around 32% of locals own their homes, meaning that there is high demand in the rental market.
The demographic skews young, with 31 being the average age of Mid-City residents. Only around 26% of the local households have children. And there is a higher-than-average rate of adults who have never been married (43% of men and 35% of women). Despite so many single households, the average household income is a respectable $70,000, indicating that individuals are earning above-average incomes.
From these demographic factors, we can infer that many Mid-City residents are young professionals.
Mid-City Real Estate Market Highlights
Here is what you can expect from the Mid-City housing market.
- High Home Values. The median home sales price is $1.3 million (as of October 2023).
- Solid Appreciation Rates. The median home price in Mid-City has increased by 32% over the last five years, with an average appreciation rate of 6.5% per year.
- High Demand. The average home in Mid-City sells within seven weeks of hitting the market, typically going for 1.3% over the asking price.
- Sustainable Rental Rate Growth. The median rental rate for a one-bedroom in Mid-City is currently $2,100, up 5% from this time last year. Two bedrooms are up 15% to $2,773. Three bedrooms are up 2% to $3,995.
Mid-City is an utterly livable urban neighborhood. With grocery stores, fitness centers, coffee shops, and boutiques scattered conveniently throughout the area, you’re never far from the amenities you want. Plus, Mid-City is more walkable than much of Los Angeles, which is a major benefit to healthy, eco-conscious residents who prefer to walk rather than drive when possible.
This diverse neighborhood offers lots of shopping, parks, and nightlife. And the locals all rave about the inventive food scene. Roscoe’s Chicken and Waffles, anyone?
While Mid-City has a lot to offer within its geographic boundaries, its central location gives it the added advantage of easy access to nearby neighborhoods and their amenities. Just outside the official Mid-City borders, you’ll find world-class attractions including the La Brea Tar Pits, The Grove shopping center, Pan Pacific Park, and Museum Row, which includes the spectacular LA County Museum of Art (LACMA). Even the Hollywood Walk of Fame, Griffith Park, Beverly Hills, and Crypto.com Arena (formerly Staples Center) are just a short drive away.
Surface streets make it easy to get around central LA from Mid-City, and the 10 freeway opens up access to the whole metro area. Expansion of the Expo Line from Downtown to Santa Monica has brought multiple train stops to the Mid-City area, making it easier to commute into the Financial District or escape to the beach.
Real Estate Investment Opportunities in Mid-City
Three investment types are projected to perform particularly well in Mid-City, based on resident demographics and local market conditions:
1. Multi-Family Developments (Especially Near Metro Stops)
The expansion of the Expo train line has created additional demand from young professionals in the area. The Mid-City metro stops make for a more enjoyable commute, especially for those working 9-5 downtown. The train is a favorable alternative to rush hour traffic. So there is an increased demand for apartments near metro stops in Mid-City.
This is an exceptional opportunity for an investor or developer to create more housing units by constructing multi-family properties in the area. Multi-family development can be highly lucrative in LA thanks to zoning laws that allow multi-family properties to be built on land that was originally zoned as single-family. Single-family homes in distress can be demolished to build a multi-family structure that can provide much-needed units of housing inventory.
2. Co-Living Spaces
With the high demographic of single young professionals present in Mid-City, well-designed spaces tailored for those with multiple roommates could perform well in this neighborhood. As young professionals look for ways to make housing in high-priced markets more affordable, many look to share the rent with multiple roommates. But these professionals still want a high standard of living, so they may not be willing to share bathrooms or argue over who gets the primary bedroom.
This is where co-living developments come in. Shared-living spaces are designed specifically for multiple roommates. With three to five bedrooms of similar sizes, each with its own en suite bath, these units can comfortably accommodate multiple roommates. And because this layout allows residents to split the rent multiple ways while maintaining a level of at-home privacy, they are in exceptionally high demand.
3. Crowdfunded Projects
The high cost of property in Mid-City can present a hurdle for investors. A 20% down payment plus closing costs on a $1.3 million property can easily exceed $330,000. And that’s before any renovations or vacancy losses are factored in.
The solution is real estate crowdfunding. Crowdfunding pools funds from multiple investors, which reduces the minimum investment amount for each investor. With crowdfunding, you can potentially buy into a multi-family development like we’ve discussed in this article for as little as $25,000. Plus, crowdfunded deals are professionally managed by a project sponsor, which means you can invest without any prior experience, industry knowledge, or sweat equity. Your returns will be passive income!
Summary: Is Mid-City a Good Place to Invest in Real Estate?
Based on the high demand for housing from young professionals and the limited supply of affordable options, Mid-City is a good place to invest in real estate.
Invest in Mid-City Real Estate with Gatsby Investment
Gatsby Investment is a real estate investment company that offers crowdfunded/syndicated residential investment projects in Los Angeles. Our local team of experienced analysts, project managers, builders, and marketers specialize in maximizing return potential for real estate investors.
We offer a wide range of real estate investment opportunities, including the multi-family development projects that are performing so well in Mid-City.
Learn more about investing with Gatsby and start investing in Mid-City real estate today!