Rent rate increases in SoCal deal analysis

[Hector Sapinoso]

Hi BP,

I've been reading Gary Keller's Millionaire Real Estate Investor, and I'm at the section where he discusses increasing NOI on your properties. One of the strategies he mentioned is increasing rents, and in the book he had a pretty high annual increase. I've been using a SFR deal analysis spreadsheet I pulled from the FilePlace to analyze buy and hold properties within a couple of hours of Los Angeles (where I live), mainly the Inland Empire and Ventura County.

I'm wondering what sort of rental rate increases I should use if I'm analyzing properties in SoCal, but not necessarily within the county of Los Angeles. Is 2% good? 3%?

Also, the book mentioned including annual rent increases when your tenants sign the lease. How frequent or common are multi-year leases in SFR rentals? What is a common length on multi-year leases? When I was in college, my roommates and I always signed one-year leases, but I have no experience with longer-term single family rentals.

Thanks in advance!