What else can I say, but “here we go again…” A few City of Los Angeles Councilmembers had proposed to further delay the resumption of annual rent increases on rent-controlled units in the City by six months. Since March 2020, for about 3 and a half years and counting, the City of Los Angeles has banned rent hikes under so-called “temporary” and “emergency” measures related to the pandemic. Yet, despite everything and anything being “open for business,” City Councilmember and declared Socialist Democrat, Hugo Soto-Martinez, had introduced a motion to push the February 1, 2024, “freeze” expiration date back to August 1, 2024. The motion was seconded by Councilmember and fellow Democratic Socialist Party member, Eunisses Hernandez. Fortunately, the motion did not make it out of the City’s Housing Committee, but the audacity of the proposal is clear.

However, what did get pushed through the Housing Committee was a proposal championed by “comrade” Soto-Martinez to lower the current maximum rent limitation of 8% to just 4%, a 50% reduction – the proposal was made and passed by the committee without any call for a study of the impacts this may have on housing providers who are struggling today to survive under skyrocketing costs and no rent increases.

Fraud prevention is always a priority in property management, but it’s an even bigger issue now that many (or most) interactions occur online. Plus, fraud is more common than some people realize. According to Kent Simpson, industry principal of screening and fraud solutions at Yardi, about 1-4% of applicants provide fraudulent identification and 4-10% submit fraudulent proof of income.

“One slip can waste your time, money and damage your reputation. The average eviction costs $7,500 per instance,” he said.

Fraud prevention: you only know what you know

By Dwight Kay, Founder & CEO, Kay Properties and Investments

It seems like everyday there is another reason showcasing the reason why more and more investors are choosing to stay debt-free when investing in Delaware Statutory Trust (DST) properties in a 1031 exchange. 

Headlines Show Dangers Surrounding Leveraged Real Estate

Just look at any business or real estate-related publication, and you will see the headlines are full of examples of real estate firms that have been forced to relinquish assets because they succumbed to the lurking liabilities of leverage. In many cases, these firms were led by highly skilled executives with years of experience and files of successful transactions. However, even these world-class real estate firms are creating a case for staying debt-free.

Here are just a couple of examples in the news to illustrate the point:

BY STEVEN GREENHUT

SACRAMENTO – California has in recent years embarked on a remarkable legislative journey that has seen some of the state’s most-onerous land-use regulations rolled back. Lawmakers have recognized that government restrictions are the key reason housing prices have reached absurd levels of unaffordability. Various new laws have provided streamlined “by right” building approvals. They don’t go far enough, but change is welcome.

I’ve called out conservatives, who have often fought housing deregulation measures even as they vow support for property rights and freedom. For example, Huntington Beach’s conservative council majority, in its lawsuit challenging state housing reforms, has trotted out every NIMBY (Not In My Back Yard) and environmentalist platitude one expects from the Left.

By Tim Campbell

In early 19^th-century Britain, a radical reactionary movement embraced by a group known as Luddites rose within the textile industry.  Until the Industrial Revolution, textile weaving was a labor-intensive skilled craft.  Weavers needed years of apprenticeship to learn their trade, and limited production meant skilled craftsmen could demand top wages, at least in terms of working-class incomes.  The advent of industrial machine-based weaving meant unskilled low-paid laborers could produce vast quantities of good-quality cloth at a fraction of the cost of hand weaving.  Perceiving a threat to their livelihood, weavers created the Luddites and, under the command of the fictional “General” Ned Ludd, staged public demonstrations against the new machines; the more radical among them carried out nighttime raids on textile factories, destroying machinery and attacking workers and owners.  Typically for the British government of the time, the movement was repressed with brutal efficiency, using troops under the command of the Duke of Wellington, hero of Waterloo.

Dear Kari, Someone Suggested That I Should I Give My New Tenant a Welcome Gift – What Do You Think?

First Impressions Matter: The Power of a Thoughtful Welcome Gift

By Kari Negri, Chief Executive Officer, SKY Properties, Inc.

Have you been looking to add a special touch to your move-ins? Consider the impact of a thoughtful welcome basket. A warm welcome basket not only leaves a fantastic first impression but also helps your tenants settle into their new home with ease. It’s a small but meaningful gesture that shows you value and care for them. Plus, it can go a long way in making them feel at home in both their new space and neighborhood.  Moreover, if you do it right, it can save you money. Here are some questions you need to answer when putting together the perfect welcome tote bag:

By Brittany Benz

Between showings, lease signings, maintenance, and renewals, there are myriad carefully coordinated tasks that must be completed on-site every day. To be as successful and efficient as possible, property management teams need to operate like well-oiled machines. Unfortunately, most property management teams aren’t working that way today.

In a survey of more than 1,000 property management professionals, 62% cited “operational efficiency” as one of their most pressing challenges. More specifically, they cited the need to ensure smooth handoffs between team members in multi-step processes and to free teams from labor-intensive tasks as particular pain points.

By Lauren Oliver, Opportunity Now

Californians will vote next year whether to pass the Justice for Renters Act, which would reallow rent control ordinances statewide (they’ve done so well in SJ, right?). Here, Daniel Yukelson—Executive Director of the Apartment Association of Greater Los Angeles (AAGLA)—pinpoints why “stabilizing” landlords’ rents would drive up housing scarcity, making home offerings lower quality and rent much costlier for already-struggling tenants. An Opp Now exclusive.

Opportunity Now: The Justice for Renters Act purports that California’s ban on rent control prevents local governances from addressing housing market crises. But you assert the contrary. How can something as innocuous-sounding as “stabilizing rents” actually be harmful for Bay Area cities?

Daniel Yukelson: Rent control and layers of related renter protection regulations literally obliterate the investments in income property made by private citizen owners, who had purchased these properties to own what had traditionally been a secure investment and a means to provide stable income when they retired.

By Max Glassberg

There are many reasons residents choose to leave. They might be buying a home, something many renters aspire to do. There’s nothing you can do to prevent that, nor would you want to: resident satisfaction isn’t about changing people’s life plans, but rather about maximizing the number of renters who would want to renew their leases. In other words, it’s about resident retention.

After all, some residents leave for entirely preventable reasons:

• A bad experience with a rude staff member
• Unresolved maintenance issues
• Unhelpful or unknowledgeable personnel
• A feeling that their input or suggestions don’t matter

Improvements in resident satisfaction can help build long-term relationships within your community, but satisfied renters also add value to the property itself. It’s great to bring in new faces, but your renewing residents are an invaluable asset to your community. Let’s look at 10 strategies you can use to ensure a positive resident experience and create a happier community.

1. CREATE A STRONG NEW-RESIDENT WELCOME EXPERIENCE

A personal touch is always going to help get the relationship off to a good start. It helps residents feel welcomed and positive about their decision to move to your property.

• Write handwritten welcome notes
• Offer new residents a guide to the neighborhood
• Give residents the ability to submit work order requests from their phones
• Allow them to set up autopay so they can pay rent straight from their account without hassle

By Austin Bowlin, CPA

Real estate investors can face challenges as they reach retirement age and focus on estate planning. Often, their real estate holdings have appreciated in value while annual depreciation has reduced the property’s cost basis. Because of this, selling a property before passing away can result in substantial capital gains taxes. However, an investor’s heirs may not be interested in actively managing those real estate properties once the investor has passed away. If suitable, a 1031 Exchange into a Delaware Statutory Trust (DST) may provide a solution to this problem. DSTs allow investors to sell properties without tax consequences, receive potential consistent income from real estate investments, and preserve the eventual step-up in basis upon the investor’s passing.