California Rent Control Issues for Landlords & Buyers

[Kevin Dee]

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.

Thanks!
Kevin

[Ryan Scott Isacksen]

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.

Good luck.