Inherited tenants and rent increase under Los Angeles rent control

Member since 2018 · 4 posts · 1 vote

Hi there!

I'm considering offering on a 3 unit property. Two units will be vacant upon closing. I plan to fix up one and rent at market, then house hack in one of the units. The tenant that will be remaining is paying $876 per month. The unit after some updating could easily go for $1,800. My question is how difficult, under Los Angeles rent control would it be to raise the rent after the lease is up? Is this a deal you would pass on? I think it's a great deal, so long as I can raise rents to market. Thoughts?

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Nathan GesnerBusiness Member
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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
3y
Quote from @Kai George:

1. I would never purchase in an area that has rent control.
2. Terminate the Tenant paying $876 a month and move into their unit, even if it's just for a short time. This enables you to rent the other two at market rate. Then move into one of the others when they open up and rent out the $876 for market rate.
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Dan Portka
Real Estate Agent · San Pedro, CA · Member since 2019 · 253 posts · 128 votes
3y
@Kai George Congrats on finding a property you're interested in and where the numbers work for you! Is the property in the city of LA?
A few things you want to be aware of:
- You're obligated to pay relocation fees for the current tenant if you plan to evict them
- That tenant has a right to return within 3 years if you move out of that unit before then at the Rent previously charged plus any allowable annual Rent increases
- 1 annual rent increase is allowed which is tied to CPI
- Rent increases for capital improvements need to be pre approved by the city/county. Its possible but you have to meet certain requirements.

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