Is Silver Lake a Good Place to Invest in Real Estate?
By Michelle Clardie on 03/31/2024.
Reviewed by Dan Gatsby.
Silver Lake has made a name for itself as Los Angeles’ walkable, hipster neighborhood. This residential neighborhood of 30,000 residents is packed with unique boutiques, innovative eateries, exciting art galleries, and trendy nightclubs. You can leave your car at home; this compact area is more walkable than most neighborhoods in LA.
Silver Lake is currently ranked in several categories on Niche.com for the best neighborhoods in LA (out of 111 Los Angeles neighborhoods):
#14 on the list of the Best Neighborhoods to Live in LA.
#11 on the list of the Best Neighborhoods to Raise a Family in LA.
#17 on the list of the Best Neighborhoods for Young Professionals in LA.
But is Silver Lake a good place to invest in real estate? Or does the high cost of housing outweigh the benefits?
In this article, we’re exploring local market trends to see what Silver Lake can offer to real estate investors. Then you’ll be able to make an informed decision regarding whether Silver Lake is a good place to invest in real estate.
Overview of Silver Lake, Los Angeles
Bordered by other interesting neighborhoods like Echo Park, Koreatown, East Hollywood, and Los Feliz, Silver Lake is centrally located with easy access to the rest of the city.
The population of Silver Lake skews young with 61% of residents being under 45 years old. Locals are well educated, with 63% of residents holding a Bachelor’s Degree or higher. In fact, one in every five residents holds a Master’s.
Compared to the current national average of $75,149, Silver Lake residents are typically high-income. The median household income is a high $116,043, with 35% of households earning more than $150k annually.
Silver Lake Real Estate Market Highlights
Here is what you can expect from the Silver Lake housing market:
Higher-than-Average Property Values. The median home sales price is $1,400,000 (as of February 2024).
Fair Rates of Appreciation. From February 2019 through February 2024, the median home price in Silver Lake increased by 26.6%. This is an average appreciation rate of 5.3% per year.
Longer Home Sale Timeframes. The average home in Silver Lake sells for a respectable 99.2% of the list price. However, it takes some time to find the right buyer; the average listing sits on the market for nearly three months before selling.
Exceedingly High Demand for Three-Bedroom Rentals. Median rental rates have dipped for most rental types in Silver Lake over the last year. However, three-bedroom rentals have jumped by 40%, and are currently renting for around $7,068 per month.
Silver Lake Amenities
Silver Lake is a mostly residential neighborhood, but it’s packed with amenities for locals to enjoy. Vegan cafes, yoga studios, art installations…this progressive community values creativity.
The Silver Lake Reservoir is a popular spot for locals to soak up the SoCal sunshine. There is a trail around the reservoir plus multiple parks, including Silver Lake Dog Park.
While Silver Lake is largely walkable, the best way to access the rest of the city is by car since there are limited public transit options in Silver Lake. But you won’t have to be in your car for long. Those commuting to Downtown LA have just a 5–10-minute drive. Even with some traffic, you can usually get Downtown in under 15 minutes.
One of the closest attractions for Silver Lake residents is Dodger Stadium, which is just a 5-10 minute drive to the southeast. Locals also have easy access to Los Angeles landmarks like Griffith Park, the Griffith Observatory, the LA Zoo, and the Hollywood Sign. These are all located just 10-15 minutes’ drive to the North, on the other side of Los Feliz. Residents can also follow Hollywood Boulevard west to find world-famous Hollywood attractions like the Walk of Fame, the Chinese Theatre, and the Hollywood Bowl.
Real Estate Investment Opportunities in Silver Lake
The high property prices and long sales timeframes have caused some investors to bow out of the Silver Lake housing market. This is great news for the investors who recognize the opportunities in this market because there is lower investor competition for this high-demand area!
Here are two real estate investment strategies that are currently working well in Silver Lake.
1. Co-Living Spaces
Young professionals love the vibe of Silver Lake and the proximity to Downtown LA. What they don’t love so much is the cost of living. So many renters in their 20s and 30s are looking for co-living spaces, in which they can share the unit with three or more roommates to split the rent.
This trend provides an opportunity for investors to tap into the growing market. Developing specifically for multi-roommate living includes making larger units with more bedrooms, all comparable in size, and all accompanied with their own bathrooms. This makes for a space that’s easier to divide fairly than the traditional primary-suite-with-guest-bedrooms layout. It also gives roommates more privacy.
Spaces that comfortably accommodate multiple roommates are growing in demand all over LA, but especially in young-professional favorites like Silver Lake where prices are high.
2. Family-Friendly Rentals
As the housing market in Silver Lake becomes increasingly unaffordable for many families, there's a growing demand for rentals that cater to long-term, family-oriented living. The Build-to-Rent (BTR) development model aligns perfectly with the needs of these would-be homebuyers who have been priced out of the market. BTR properties are built specifically with the needs of long-term renters in mind. These properties can comfortably accommodate growing families, providing them with the comforts of a home without the financial burden of homeownership.
For investors and developers, this approach offers the advantage of higher rental incomes and reduced tenant turnover as families set down roots in these rentals.
Summary: Is Silver Lake a Good Place to Invest in Real Estate?
Based on the high demand from young professionals and growing families, Silver Lake is a good place to invest in real estate, particularly if you can fill the specific need for larger rentals. In fact, Silver Lake ranks on our list of the best neighborhoods to invest in real estate in Los Angeles.
Invest in Silver Lake Real Estate with Gatsby Investment
Gatsby Investment is an LA-based real estate investment company that specializes in finding deals with high return potential under any market conditions.
We offer crowdfunded deals, which allow you to passively invest in high-value projects with low minimum investment amounts. And, because the project is professionally managed by our local team of real estate analysts and project managers, your returns are completely passive.
We offer a wide range of real estate investment opportunities, including the co-living developments and family-friendly BTRs that are performing so well in Silver Lake.
