The Apartment Buildings Conference & Expo on October 2nd is a free educational event featuring guest speakers, seminars, breakout sessions and an exhibit hall for multi-family owners, investors, property managers and service providers. It’s the perfect place to catch up on the latest housing news, trends and to get advice from industry experts. Attendees are invited to pre-register free at www.BuildingsLA.com.
In this article, I’ll lay out five practices that the best property managers turn into longstanding habits. I’ve returned to them consistently throughout my career, and they apply to the management of all forms of real estate, from retail to residential, office to industrial. When managing, organization is of the utmost importance. You’ll find that principle at the heart of these tips.
The relationship between the landlord and the tenant is a professional and cordial one. The landlord or Housing Provider provides the property, and the tenant pays their rent and hopefully loves their apartment and community in return. The landlord and tenant relationship can be much more complicated than that if one of them does not fulfill their various obligations. As most of you know many relationships do not always remain steady. Problems and disputes arise with time, and things can go off track.
Things change: your perspective, your appetite for risk, and even your investment criteria. Sometimes the best thing you can do is move forward, and that can mean selling an investment property. When this time comes, you will have to pay off any existing liens before transferring title. For many investors, the biggest lien is their commercial mortgage. But just as you would do your research and preparation for the purchase of a property, you must also prepare to sell a property. That starts with organizing the paperwork. Are there any prepayment penalties that could cost you at closing? Do you have operating statements and rent rolls ready? Is the property in a condition fit to finance? Let’s take a closer look at potential hurdles to limit surprises.
One of the biggest disasters a property manager could face is a fire. According to FEMA, the cooling weather in fall and winter increases the number of fires and related accidents. It is crucial to inspect your properties for fire hazards now, and get acquainted with these tips to help prevent fires and keep residents safe and minimize damage if a fire does occur.
Real estate is a weird, weird world to work in. Being a landlord or rental property owner has its own challenges without trying to keep an eye on every single out-of-place law that there is. Most of the time, legislation can make sense, but some of the time, the “black sheep” of laws seems to come out of nowhere. Check out some of these nonsensical laws that seem difficult to explain.
When you’re about to start renting your investment property, one of the first things on your list should be a well drafted lease. Choosing to go with a lawyer to help you draft the lease is an excellent idea since your attorney has experience in this area and will make sure you dot all your i’s and cross all your t’s. If you can’t afford a lawyer to help you with this task, or simply want to tackle this on your own, then reading up on this article will greatly help you cover very essential points in your tenant lease agreement. Including important clauses in your lease will prevent future headaches if (and when) you’re faced to battle legally against one of your tenants.
Another week, another lie about Proposition 13. The new narrative from the Prop. 13 opponents is that California’s high fees for building homes and commercial property is due to Proposition 13 denying local governments the ability to raise revenue.
A study just released by the University of California Center for Housing Innovation concluded that the “impact fees” that local governments charge developers are a big reason why it’s so expensive to build a home in California. The fees are not only costly, they’re also unpredictable, lack transparency and can kill a project’s viability, according to the study.
The client has invested in real estate since 1987. After experiencing difficulties in renting an industrial property she owned for the past 13 years, it was time to sell. Having sold many properties in the past, the concept of doing a 1031 exchange was all too familiar to her. She questioned whether or not to do it this time. In consulting her financial advisor and CPA, she was informed of the tax consequences in selling this property. In hearing this information, she inquired into the best course of action for her tax situation. The advice was based on a simple question, “Do you want another rental property”? Emotionally, the client was tired of the responsibilities associated in being a landlord, in addition to everything involved in purchasing another rental. Logically, however, it was concluded that the best course of action was to purchase a replacement property and defer the taxes.
The latest incarnation of California’s rent control measure that was defeated last November has returned. Proposition 10 2.0, Michael Weinstein’s Rental Affordability Act, is targeted to be back on the ballot in 2020.
The state’s Legislative Analyst’s Office (LAO) says the bill will result in a number of negative impacts, including California’s housing situation, the state’s finances as well as CRE market. The LAO says it would likely drive rental units from the market, decrease apartment property values, and possibly diminish annual tax revenues by tens of millions of dollars or more.
California voters turned down Proposition 10 last year, but the new version of the bill would allow cities and counties to impose rent control on buildings after they turn 15 years old. Under the Costa-Hawkins Rental Housing Act, local jurisdictions may not impose rent control on units built after 1995.
The proposed measure would also once again allow local governments to apply vacancy controls, meaning rents would remain regulated in rent-controlled jurisdictions even after changes in tenancy.
“The analysis clearly points to a reduction of available homes, as stricter rent control leads property owners to take units off the market, said Tom Bannon, CEO of the California Apartment Association. “Prop 10 2.0 would drive down property values and prompt an exodus from the rental housing market. California needs sensible housing policies that protect tenants and encourage the building of affordable homes for working families. This measure makes the crisis worse.”
