Investing in Vacation Properties in the South Bay Housing Market

Vacation Properties in South Bay

Why is the South Bay a good place to invest in a vacation property?

Los Angeles County aims for 50 million visitors each year, spending over $18 billion on the economy in 2023. South Bay is one of LA’s top destinations, with iconic beaches and a slew of attractions to entertain travelers. 

To make sure you’re investing, and not creating future headaches, we’ve created a short guide. Use it to learn about South Bay and why it's highly investable. 

Palos Verdes Drive

Palos Verdes Drive - via Doug Kerr

Where is the South Bay?

When someone says “South Bay,” where are they talking about?

South Bay, CA, is in the southwest corner of Los Angeles County, bordered by land and sea. 

There are the beach cities of South Bay:

  • Playa del Ray
  • El Segundo
  • Manhattan Beach
  • Hermosa Beach
  • Redondo Beach
  • Torrance
  • Palos Verdes Estates
  • Rancho Palos Verdes
  • Coastal San Pedro

Palos Verdes Shore

Palos Verdes - via Sergei Gussev

Then, there are numerous cities without direct ocean access:

  • Carson
  • Gardena
  • Hawthorne
  • Inglewood
  • Lawndale
  • Lomita
  • Harbor City
  • Harbor Gateway
  • San Pedro and Wilmington
  • Rolling Hills
  • Rolling Hills Estates
  • Westchester
  • and some unincorporated areas of the County of Los Angeles

 South Bay Los Angeles Map

South Bay, CA is around 2 hours from San Diego and the San Ysidro Border Crossing into Mexico. - via Wikipedia Commons

Is the South Bay, CA a Desirable Vacation Spot?

South Bay, CA is a destination for international travel and it definitely helps tourism to have Los Angeles Airport (LAX) within the city. As the 5th-busiest airport in the world, it brings a lot of people directly into South Bay.

But is South Bay a vacation destination or just a typical Californian city?

The obvious thing to cover first is the stretch of beaches up and down South Bay. Aside from being world-class, they each have their own beachgoer demographic, so to speak. Some beaches are more rugged and less crowded, while others are known for being more tourist-friendly and manicured. 

Manhattan Beach

Manhattan Beach - via Rubixcuben

The seafood draws even more spotlights to the beach cities, and scrumptious restaurants dot the coastline.

Then, there are less-edible, pulse-raising activities on the South Bay coast. Most newcomers will love the one-of-a-kind Shipwreck Hike, which brings you to a 60’s wreck at the end. You can also join the beach volleyball, rent bicycles, go surfing, or play in 100-foot-high dunes on Manhattan Beach. 

Surfing in Los Angeles County Waters

Surfers jockey for position in the Los Angeles county waters - via Miguel Discart

Are Beaches the Only Attraction in South Bay, CA?

The beaches are a big tourism draw to the area, but so are the less sandy attractions. Let’s cover those for a moment.

Historical sites, like the Dominguez Rancho Adobe Museum and the Torrance Historical Society, give a glimpse into the past. These are just two of the dozens of historical sites and museums around the South Bay, reminding us of the Spanish colonial, Mexican, and Californio periods.

Dominguez Rancho Adobe Museum

Dominguez Rancho Adobe Museum - via Vanesser III

Families can easily find fun activities in South Bay. The Lomita Railroad Museum has plenty of steam-powered trains and other vehicles on display. Other spots for vacationing families are the Wonder of Dinosaurs exhibition or the Roundhouse Aquarium. There are also several historic theatres around South Bay, like the AMC Dine-In Theatre or the Gardena Cinema from the 40s.

South Bay also has modern attractions, like the Falcon 9 First Stage rocket from SpaceX, and the Los Arboles Rocketship Park in Torrance. Disneyland is just 30 minutes away, a feather in the cap of any vacation property.

The shopping is splendid in South Bay. Manhattan Beach is a top sunset viewpoint, but also one of the best boutique shopping spots in South Bay. mbWINEco is in the same area, with wine floats, live jazz, and charcuterie boards. There’s a lot of retail up and down the coast, like the famous South Bay Galleria, The Point, or Plaza El Segundo.  

Eventually, visitors might take a break from the beach. South Bay’s beaches are a stone’s throw away, but so are the Santa Monica Mountains, Topanga State Park, and Angeles National Forest. It’s a short car journey to reach any of these enormous green spaces and hike, bike, or stroll to your heart’s content.

Topanga State Park

Topanga State Park - via Jeremy Thompson

How to Buy Vacation Properties in South Bay

Vacation homes are all over South Bay, though you’ll want to pay careful attention to a few factors. 

  • Is the home in a great location?

Vacation rentals can’t hit maximum ROI without an ideal location, or at least, nearby access to those locations. This doesn’t necessarily mean you need a vacation property built on the sands of South Bay’s beaches. Plenty of tourists won’t mind being a few minutes away, as long as your property offers something in return. 

  • Does the property need upgrades?

We know about renter expectations because we hold similar expectations of hotels, Airbnb, and long-term rentals. Before profits, you’ll have to factor in the cost of repairing or upgrading the property to acceptable standards. 

Luxurious Home in Hermosa Beach

A lavishly-styled home in Hermosa Beach - via Bradford Fults

  • What is the ROI for the home?

The total purchase price, renovation cost, and annual rental income projections. These are a few things you’ll need to calculate your South Bay vacation property ROI. Once you total the expenses, use the expected rental income to find your ROI. 

Divide the vacation property’s net income by the total property cost, then multiply by 100 to find ROI expressed as a percentage.

You must be familiar with utility costs and South Bay property tax to avoid financial surprises down the road. Ask local real estate agents about this, as well as the hottest areas to invest in the vacation property market. 

What is the South Bay Real Estate Market Like? 

South Bay, CA is a seller’s market, although the median sale price has dropped around 2.8% from January 2023 to January 2024. That’s good news for anyone looking to break into the market. 

Over the same period, 2, 3, 4, and 5-bedroom homes are selling for less, while 1-bedroom South Bay homes are selling for slightly more. 

The median sale price for a South Bay home is around $1.2 million. This is a massive area we’re talking about, so you should check with a realtor about specific cities within it. Some of the coastal cities may have higher medians, though this might not negatively affect ROI.

We’re here to help. The Jamison Team can consult you on finding profitable vacation properties, and then guide you on managing them. Call our local offices and speak with one of our realtors, or go digital by filling out a quick contact form.

More Questions? Follow-up With Us!

If you have more questions about what to expect from the markets around the Bay Area, don’t be afraid to reach out to us today. Our experts are experienced in all property types and the entire San Francisco Bay Area, and we can help you to find what you need to know today.

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