Garlic is fragrant and delicious. Whether you like it on your bread, in your pasta sauce, or roasted and enjoyed on its own, this culinary staple is not only found in kitchens everywhere, it’s also a well-known weapon against vampires.
Garlic is abundant in Gilroy. It’s the garlic capital of the world, actually, and this small but blossoming community in California has slowly been gaining national attention thanks to its annual Garlic Festival.
Not only is its garlic getting attention, but the real estate market here is, too. Real estate investors are taking an interest in Gilroy, and it’s not just the agriculture that’s bringing them here. This city is unique and iconic. It’s charming and super-local, even though it attracts tourists from all over.
There’s a lot that Gilroy has going for it. Just an hour away from Silicon Valley, it’s an ideal place for remote workers and tech entrepreneurs. This is a community that’s more affordable than other nearby cities like San Jose and Los Gatos. People who want to live close to the Bay Area without paying big Bay Area prices are drawn to this market.
If you’re looking for a real estate market with a lot of opportunity and a lower-than-average financial entry requirement, consider Gilroy, California.
Here’s what real estate investors need to know about investing in Gilroy, aka Garlic City.
Overview of the Gilroy Real Estate Market
Whether you’re investing in Gilroy because you live near the area or you’re investing from afar and potentially without seeing Gilroy at all, we want to tell you a little bit about what you’ll find here as you search for an appropriate property to buy.
Gilroy is a growing city in the Bay Area that has a diverse real estate market, which is quickly changing, growing, and shifting. This area has had a significant increase in property values over the last decade, just like many markets across the country.
While the higher property values are attractive, the fact that acquisition costs are still so much lower compared to other parts of California is what really draws investors here.
The population of Gilroy, California is hovering at about 50,000 people. It’s a small city but one that stands on its own, economically and culturally. There’s a good mix of suburban and rural neighborhoods, and renters appreciate having options when it comes to location and property type. You’ll find a strong tenant pool here, and that’s what we’ll tell you about next.
Rental Demand and Vacancy Rates in Gilroy
Because this city is so close to Silicon Valley, many people who work in the tech industry are choosing to live in Gilroy, which has increased the demand for rental properties. The rental vacancy rate in Gilroy is relatively low, resting at around 3%, which provides a lot of potential to investors who are looking for a market where they can be sure they’ll keep their property occupied.
Remote working trends and opportunities have helped Gilroy attract new tenants. It’s possible to live here and work in Silicon Valley, especially if you can work from home full-time or even part-time.
Average rents in Gilroy range from around $1,800 to more than $2,300, depending on property type and size.
Property Taxes and Landlord/Tenant Laws
Before you invest in a market, you want to know what you’ll pay in taxes. You’ll also want to know what the local and state laws mean for you and your investments. There are a lot of regulations that come with renting out a property in Gilroy, and that’s especially true because of the strict tenant protections that are in place throughout California.
Some of the laws that are likely to impact real estate investors in Gilroy are the same laws that would impact you anywhere in California. You’ll need to be mindful of rent control laws and just-cause eviction requirements. There are habitability standards to meet and new laws for multifamily properties that require organic recycling capabilities.
The best thing you can do to understand landlord and tenant laws in the area is to talk with a Gilroy property manager. We can not only educate you on the laws, but we can also make sure you’re compliant once you do begin leasing a property here.
The overall property tax rate in Santa Clara County, which includes Gilroy, is around 0.74%.
Property Appreciation and ROI
All investors are rightly concerned with what they can earn in a given market.
Here’s what we can tell you about Gilroy.
The appreciation for properties in Gilroy has been steady over the last decade and is expected to continue. The appreciation rate for Gilroy homes has been around 4.6% annually, and that’s over the most recent 10-year period.
There’s promising return on investment (ROI) here. The increase in demand for well-maintained rental homes in good locations, the comparatively low home prices, and the appreciation rates make buying in Gilroy an outstanding long-term investment.
Tips for Gilroy Real Estate Investors
If you’ve decided that you’d like to invest in Gilroy real estate, here are a few parting tips for you to think about:
- Conduct your own due diligence on the market. You understand your investment goals better than anyone. Make sure a market like this fits what you need for your portfolio to grow and succeed.
- Work with local experts. Surrounding yourself with Gilroy real estate and property management experts will help you make good decisions and identify excellent opportunities.
- Know your numbers. The right investment will depend on where you are financially and what you can do in terms of budget. Understand how you’ll finance or pay for your investment and where you expect your greatest expenses to be.
Finally, analyze the local rental trends, vacancy rates, and rental values. We can help you get through all of this information and tell you what it means for your own investment goals.
Please contact us at South County Property Management. We serve Santa Clara County and South County, including San Jose, Campbell, Saratoga, Cupertino, Sunnyvale, Los Gatos, Milpitas, Morgan Hill, Gilroy, and neighboring areas.
