California Rent Control and Multi-Family Investment

11 Replies

As an agent in the Inland Empire / Southern California, I am wondering how investors and investor’s agents will be analyzing future deals and strategies with regards to the new California rent cap law. Especially with Multi-Family properties.

Maybe the better question is what exit strategies do investors have when a law is passed that has changed or will change the future Returns on an investment property?

the new rent control law on the surface seems that it will discourage future investors from purchasing rentals. Wouldn’t this lead to less supply of quality rentals which will drive up costs for purchases and rents?

Just a lot of unknowns...

Given the new rent control law in California, I believe condos and SFRs (including halfplexes) which are exempt from the State Rent Control bill AB1482, have now become more attractive than multi-family dwellings (2-3-4plex, apartments). 

Here in Sacramento, condos prices have not reached their previous peak yet (in 2005). Furthermore, FHA just recently relaxed their financing requirements. This will add a considerable number of buyer into the market. I expect therefore that prices of condos will rise.

@Michael Maslanka @James E Tan Welcome! I feel the biggest thing for multi family or anything other than a SFH is all about SCREENING your tenant. This will be scrutinized to no end by investors. I dont think landlords will be taking any chances on people anymore. Wise landlords anyway. This will leave more people without housing. Making it harder to get rid of a bad tenant will not help the housing situation. Good luck and keep us posted!