Investor · Great Neck, NY · Member since 2013 · 38 posts · 3 votes
Hello, I'm interested in owning rental property in certain areas of California where I see that there is rent control. I wanted to speak to someone with experience with this and ask if it's feasible to make this a good investment? What are the pitfalls and benefits when considering these investments? My locations are Oakland and Berkeley.
Property Manager · Castro Valley, CA · Member since 2016 · 212 posts · 110 votes
9y
Hi Kevin,
I work with properties in Oakland and Berkeley. The advantage of this area is the *incredibly low vacancy rate* that a property will have (as long as you aren't overly ambitious with your rent). The problem is going to be that you will have tenants that may be entrenched for most of their life in an apartment.
Do the numbers on your property you are looking at and make sure that it works where it currently stands. When you are fortunate to have a long-term tenant move out, then you will need to plan on spending a chunk on a turnover to update the apartment to make it attractive enough to command market rent.
Your vacancy rate will be the amount of time it takes you to get your unit ready.
The politics in the area is rather anti-landlord. That discourages development so it is going to remain a low supply market for some time. Count on the city to come up with new fees to tack onto you here and there.
Property Manager · Castro Valley, CA · Member since 2016 · 212 posts · 110 votes
9y
Hi Kevin,
I work with properties in Oakland and Berkeley. The advantage of this area is the *incredibly low vacancy rate* that a property will have (as long as you aren't overly ambitious with your rent). The problem is going to be that you will have tenants that may be entrenched for most of their life in an apartment.
Do the numbers on your property you are looking at and make sure that it works where it currently stands. When you are fortunate to have a long-term tenant move out, then you will need to plan on spending a chunk on a turnover to update the apartment to make it attractive enough to command market rent.
Your vacancy rate will be the amount of time it takes you to get your unit ready.
The politics in the area is rather anti-landlord. That discourages development so it is going to remain a low supply market for some time. Count on the city to come up with new fees to tack onto you here and there.
I have also opened my search up to Emeryville CA as there seems to be no rent control there now. Who knows what will happen later though. The numbers look better than NYC, that's a good thing. But I don't live in CA so I wanted to ask for a local's perspective too. I don't mind very long term tenants as long as I can legally raise rent.
Thanks for contributing to the discussion! Would love to hear more things about good condo investments in that area where tenants would have to fight for living space!
Fresno, CA · Member since 2015 · 552 posts · 181 votes
9y
@Ryan Scott IsacksenRyan. It's odd that in Oakland where it's already anti-landlord they are now pushing for harsher rent controls. What can be done about it?
@Kevin Dee California is anti landlord and they are now contemplating this--
I think reaching out to CAA to see how we can help get through to the state politicians is essential.
I am not certain what can be done about the stance of the city politics. I don't know if there is any kind of education outreach that can be done to policy makers. Decisions seem to be based on gut feeling rather than policy or modeling after some place that has reached the goals the city has.
This goes beyond landlord / development. The general population has no financial understanding and hearing them take measures against 'greedy landlords' gets votes.
They're really rallying support for putting regulations on real estate investing throughout California and there are a lot of states that are worse. I've heard NYC, DC, and Boston are really harsh on mom and pop landlords