How much rent can i increase for next lease renewal - CA- SAC

Question

Hello Landlords,I am planning to manage this rental from next lease renewal (3rd renewal, starts from March 1st, 2022 - Feb 28th, 2023) onwards. Current rent is 2180$ (tenant pays all utilities approx ~150-200$). This is a brand new 2020 home, 1932sq.ft, 4 bed (down stairs bed room with full bath) and 3 bath.1st Year - 2020, March, 1st - 2150$2nd Year - 2021, March, 1st - 2130$ (decreased 20$ due to pandemic)3rd Year -2022, March, 1st - How much rent I can reasonably increase? all the homes in this area are listed for 2800$ + utilities (I have used online rent estimate tools like Avail,Rent-O-Meter, Zillow)

I am planning to increase 150$ per month which brings monthly rent to 2280$. $150 is too low or too high? any thoughts or suggestions really help me.

Thanks in Advance - RK

Brian Garlington · Answer

I wouldn't go anymore than 5%

Greg S. · Answer

It sounds like you already are in the ballpark with market data.  There can be differences between market data and code requirements.  Rent board code requirements are often  the worst written of all code requirements.  Understanding can be difficult to achieve and even more difficult to retain over time.

My experience in California leads me to conclude that the most important knowledge you will receive will be from experts working full time within the jurisdiction of interest.

A great way to become aware of and meet those experts is to join a regional rental housing association.  For example, in Berkeley, there is BPOA.  Across the East Bay, there is the EB RHA.  Sacramento likely has similar organizations.  Join and attend a few meetings to judge for yourself whether membership is worthwhile.

In California, depending on your jurisdiction, you must solicit opinions and advice from your LOCAL experts rather than from us who are far afield.

Mark Pedroza · Answer

@Ramki D.

These may be tedious to read but here's the current residential rent control law(s) in CA:

https://leginfo.legislature.ca...

http://costa-hawkins.com/what-...

Iv'e always considered Natomas as North Sacramento..

Ramki D. · Answer

Thanks for sharing the details. I didn't hear those association names earlier. I will explore them.

Jim Spatzenfeld · Answer

Property Subject to Rent Control

Rent control laws apply to typical rental units, like an apartment within a complex. But not all rentals in California are subject to rent control. A 1995 state law, the Costa-Hawkins Rental Housing Act, says that local rent-control regulation doesn't apply to single family homes, condominiums, and units built after February 1, 1995 (many ordinances also exempt properties built after the ordinance's effective date). The Costa-Hawkins Act also allows "vacancy decontrol" of rent-controlled units, meaning landlords can raise rents to market levels when tenants move out (voluntarily or after being evicted for rent nonpayment).

Other properties exempt from rent control include owner-occupied buildings with no more than three or four units (depending on local regulation), short-term rentals (think Airbnb), government-subsidized tenancies (Berkeley and San Francisco excluded), and detached ("granny") units that could not be sold independent of the main house.

Ramki D. · Answer

This is what I found in Google

"

How much can my rent be increased under the City of Sacramento Tenant Protection Ordinance?

A tenant’s rent may only be increased once every twelve months up to 5% plus the annual increase in the California Price Index (CPI), the sum of the two not to exceed 10%.  Sacramento, Cal. Mun. Code § 5.156.050.  Effective July 2020, the annual rent adjustment maximum rate is 6% as the current CPI is 1%. "

looks like max is 6%(130$) max increase legally

Ramki D. · Answer

California - Sacramento. Property zip code 95834. It's single family home

Scott M. · Answer

Pretty sure CA has some counties that restrict the amount of increase.  What county?

Ramki D. · Answer

California

Scott M. · Answer

What sate is the home in?

How much rent can i increase for next lease renewal - CA- SAC

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