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6 best neighborhoods to invest in San Francisco real estate

6 best neighborhoods to invest in San Francisco real estate
Ally Gong
,
Content Specialist
December 19, 2022

San Francisco is one of America's most highly sought-after real estate markets. Although the city's real estate market won't necessarily make you rich quickly, homes in San Francisco are always a safe investment because they manage to keep their value, even during tough economic times. In recent years, San Francisco properties have retained their value better than the rest of America. San Francisco is renowned for its high rents, strong demand for apartments, and well-maintained housing. San Francisco's robust real estate reputation makes it a desirable destination for local and out-of-state investors and international buyers.

This blog post will discuss the six best places to invest in San Francisco real estate. We'll explore each area's unique benefits so that you can make an informed decision about where would be the best fit for you and your portfolio.

According to data from Fortune Builders: 

San Francisco Real Estate Market 2022 Overview

Here are our picks for six of the best long-term investment neighborhoods for San Francisco. Please note that we are not professional financial advisors, so please do your due diligence before investing.

Golden Gate Heights

If you're looking to buy property in San Francisco, the best area is Golden Gate Heights. It's a relatively quiet neighborhood comprised mostly of single-family homes on the west side of town. Properties in less dense areas with more outdoor space will be in high demand. And Golden Gate Heights fits that description perfectly – it's got plenty of parks and great views, but it's still affordable compared to other parts of the city. As a result, buying property on the west side of San Francisco will give you more bang for your buck than purchasing elsewhere in SF.

Golden Gate Heights is only a 10-minute walk to some of the hottest restaurants, bars, and shops in the Inner Sunset on 10th/9th and Irving St. There are over 50 different options for food within that five-block radius. Additionally, crime rates are significantly lower in Golden Gate Heights than in other parts of the city due to its hidden location atop one of San Francisco's many hills.

This neighborhood lies at the base of Mount Sutro and is known for its picturesque views and eclectic mix of single-family homes, beautiful Victorian buildings, and high-end condos. It is also an excellent option for investors looking to purchase multifamily residences. Golden Gate Heights is a little-known neighborhood that offers numerous advantages for investors. Most properties here are single-family homes instead of condos, making them less dense than other communities.

One of Golden Gate Heights' best advantages is the gorgeous ocean views – most properties here face west towards the ocean, offering impressive sunsets for residents.

The last reason we put Golden Gate Heights as the top neighborhood in San Francisco to invest in property is that it's near the University of San Francisco and Golden Gate Park. We expect property values to remain strong here due to the demand for rental housing from students, young professionals, and those who have jobs downtown but choose to live in a more residential neighborhood.

Parkside

Parkside is another of San Francisco's most desirable neighborhoods, located on the West and close to Golden Gate Park. It boasts stunning views of both downtown and the ocean, and its proximity to amenities like cafes, shops, and restaurants makes it an ideal spot for investors who want to invest in real estate.

The median list price for homes here is $1,319,000, and the average rental price is around $3,400 a month. The Parkside housing market is highly competitive. According to recent data, the average sale price of a home in Parkside was $1.44M last month, according to Redfin. This figure represents a 15.7% decrease from last year's prices.

Parkside is ideal for anyone looking for a neighborhood with lots of green space. With more parks per capita than any other neighborhood in San Francisco, it's no wonder that homes in this area are highly sought-after – and priced accordingly. Situated near Golden Gate Heights and Golden Gate Park, with easy access to the Pacific Ocean, living in Parkside feels like being on vacation all year round.

We put Parkside second on our list of top rental investment neighborhoods in San Francisco because Parkside has attracted many young professionals and tech entrepreneurs recently. With all factors considered, steady demand makes Parkside an excellent long-term investment for rental property.

Pacific Heights

Pacific Heights is a prestigious, high-end neighborhood located northwest of San Francisco. It's known for its stately hillside Victorian and Edwardian homes, many of which boast stunning views. In addition, Pacific has several luxury apartment buildings with high ceilings, fireplaces, and elegant décor. People often think of Pacific Heights when they envision San Francisco's upscale architecture. The neighborhood is home to pastel-painted houses that are synonymous with the city.

Pacific Heights is family-friendly because things tend to be quieter at night. But that doesn't mean there's nothing to do in the evening! Fillmore Street is full of bars and restaurants, and it's a popular place for people to gather and have fun. Situated in one of San Francisco's most popular areas, Pacific Heights offers stunning bay views, Golden Gate Bridge, and Alcatraz. Pacific Heights is one of the most desirable neighborhoods in San Francisco due to its beautiful architecture, spectacular views, excellent schools, convenient location near downtown, and easy access to Marin County via the Golden Gate Bridge. It has a fantastic selection of restaurants and boutiques for those who enjoy shopping and dining out. The area is also home to several museums, parks, and cultural attractions.

With many short-term rentals available, there is a tremendous demand for long-term rental properties from those looking to make this their home. 

Although Pacific Heights is one of the most expensive neighborhoods in San Francisco, with a median sales price of $5,600,000, according to Luskinski, we rank this as one of the top San Francisco real estate investments. Even with its high prices, when a home comes up for sale in these areas, it can attract many buyers and drive up prices.

If you want to invest in property, it's best to buy in a desirable neighborhood. The demand for housing will only increase as the population and job market grows. Buying in a prime location if you have the means is always a good investment.

Sunset (Inner and Outer Sunset)

The Inner Sunset is located in San Francisco and is known for being a very walkable neighborhood with small lots of tract homes and row houses, Edwardian-style homes, and small-to-medium size newer apartment buildings. The Inner Sunset is situated between Parkside and the Outer Sunset, with plenty of great attractions and amenities in both neighborhoods. It also has light rail access and buses, making it a somewhat easier commute downtown. The corner of 9th Avenue and Irving Street is considered the Inner Sunset's epicenter, and both streets extend outward with dining and shopping options. Residents can also find a Sunday farmer's market just past that corner. With a median list price for homes of $1,269,000 as of 2020, the Inner Sunset is slightly more expensive than the Outer Sunset but offers plenty of advantages to investors.

The area is home to some of San Francisco's best restaurants, bars, and shops – all within walking distance. Inner Sunset is located just south of Golden Gate Park and is well-known for its independent small businesses. Inner Sunset's restaurant scene is considered superior, particularly among sushi lovers. It's also known for being significantly foggy: some say it lies in the heart of the "fog zone" and maybe San Francisco's foggiest neighborhood overall.

The University of California San Francisco Medical Center on the eastern side is an important research and patient care facility, as well as educates 4,000 graduate students in health sciences every year. The University creates a small-town atmosphere with a younger vibe that mingles young professionals from the tech boom with older residents of families.

Outer Sunset, located in the far West of San Francisco, is the most distant neighborhood from the city center (along with Outer Richmond). The Outer Sunset neighborhood lies West of the Inner Sunset and is known for its laid-back atmosphere. It's a great place to own property due to its relatively affordable prices (considering San Francisco's real estate demographics) – with median list prices for homes around $945,000 as of 2020.

The Outer Sunset offers single-family homes, triplexes, and condos, making it an ideal spot for investors looking to diversify their portfolios. The Outer Sunset is also known for its diversity and eclectic mix of cultures, making it a desirable neighborhood to live in and rent. With excellent public transportation options nearby, it's quick and easy to get around the city from this part of town. We rank this as a top neighborhood to invest in because it's known for having a vibrant and diverse atmosphere and welcoming new restaurants and shops.

Not to mention, with its proximity to the ocean, it's likely that property values here will continue to be strong in the future.

Richmond

If you're thinking about purchasing a property in San Francisco, both the Outer and Inner Richmond are districts you should seriously consider. The area has many perks, like being close to many restaurants, cafes, and parks. Additionally, it provides some of the most affordable housing prices in all of SF – with median list prices only around $1 million this year. Not to mention that investors can take advantage of high rental and low vacancy rates, making it an excellent choice for anyone looking for a reliable long-term investment.

The Inner Richmond is an outstanding balance of urban and suburban living - you can find energy from pedestrians, shops, cafes, Irish bars, and quieter nights. The Golden Gate park nearby has many attractions like the Conservatory of Flowers, the de Young Museum, the California Academy of Sciences, the Japanese Tea Garden, and the Botanical Gardens.

A duplex in this area usually costs $2-3 million dollars. It's an excellent investment because you can live in one unit and rent out the other, generating extra income. It also has a low crime rate, a family-oriented community, and plenty of good schools.

These Edwardian houses are gorgeous, some having been built over a century ago yet remaining in impeccable condition. Many require minor cosmetic changes like fresh paint, new floors, or an updated kitchen and bathroom, but they are real estate gems in terms of long-term investment value.

Also, there are lovely public schools close by, plus it's not too far from downtown if commuting is necessary. Keep in mind that prices increase the closer they get to downtown areas.

This neighborhood is also unique because it is one of the most diverse in terms of age; you will find students from the University of San Francisco on the eastern edge, but there is also an array of family, professionals, and older people living here as well. This neighborhood is comfortable and practical. In addition to housing, the area also boasts older Edwardian homes, cottages, and row houses.

The city is constantly working on renewing the region with projects like restructuring streets for better traffic flow and planting trees to make the neighborhood more inviting.

The Outer Richmond district is on the city's western edge, with the Presidio to its north and Golden Gate Park below. Its title as a melting pot is reflected in its diverse cuisine scene—you can find foods from all corners of the world here. This part of town includes low-rise apartments, quaint bungalows, and historic Victorians and Edwardians--all nestled against some of the city's most stunning coastline. Outer Richmond is not your typical crowded city area. The buildings and houses have a more comforting atmosphere and are usually cheaper than in other areas of the city. This town has more of a beach village vibe which appeals to surfers-- although the water can be pretty cold. Even though Richmond may face fog and colder weather, it makes up for being incredibly quiet and family-friendly while maintaining its beauty.

Glen Park

Glen Park is a neighborhood in San Francisco near Glen Canyon Park. It has the feel of a small village and is known for being inclusive. Glen Park is a hidden gem below the more popular Noe Valley neighborhood. The architecture in this neighborhood is exquisite, with many homes featuring stunning views. Primarily residential, this picturesque village-like area west of Glen Canyon Park has a secluded feeling yet is well connected to the rest of the city. There's a BART station, and easy freeway access, making it convenient for residents to get around. Prices are more affordable than in other similar areas like Noe Valley. The streets circle past small storefronts before winding through rolling hills lined with families' older homes, each having just enough yard space.

Families looking to live in a quiet area of San Francisco find themselves at home in Glenn Park.

There are shops run by families, fashionable eateries, cafes, and more! Lastly, there's a diverse housing selection consisting of single-family homes and apartment complexes.

Glen Park is the ideal neighborhood for renters who love to spend time outdoors. Glen Canyon Park occupies nearly 70 acres and offers miles of hiking trails. It's a great neighborhood to invest in rental property due to its unique ambient charm, access to nature, and high residential value.

In conclusion, these five neighborhoods in San Francisco—Golden Gate Heights, Parkside, Pacific Heights, Sunset, Richmond, and Glenn Park—all offer unique qualities that make them excellent choices for investment property. Each neighborhood has unique characteristics and advantages, from affordability to convenience, so it's essential to research and determine which one best suits your investment goals.

With the right advice and planning, owning an investment rental property in San Francisco can be a rewarding experience both financially and personally. Investing in real estate in San Francisco can be a great way to create long-term wealth and build your financial portfolio. While this article can help you decide which area is best for you, speak with licensed real estate professionals before making any decisions. Once you've invested in your rental home, Doorstead can help you find tenants and manage your properties effortlessly. Learn about Doorstead's residential property management services, and see what some of our customers say about their Doorstead experience. 

Did you find this article on rental investments exciting or helpful? If so, please share it with your friends and family! And if you're looking for more helpful tips and resources on San Francisco property management, visit the Doorstead blog.

Ally Gong
Ally Gong
Content Specialist

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