Raising Rents in Fresno, CA

[Dana Boyd]

Hello! Question for those familiar with multi-family properties in California. I know California is a tenant-friendly state so have question about rents and raising rents on tenants. If we purchase a multi-family property in Fresno, CA (a property with less than 5 units, so residential, not commercial), it's my understanding that the only way to raise the rent by more than 5% annually is to evict all the tenants. Our agent advised us that we have two options: buy a vacant unit and then set rents at any price we want, or buy occupied units and evict the tenants (with the option to give them the first right of the new rental amount.) Just want to make sure this information is accurate. If anyone has any experience in this area, please let me know. Thanks! 

[Tom Conant]

@Dana Boyd

I’m going through this right now.

I encourage you to look up Ca landlord and tenant law. The state of California made a 100 page pdf for both landlords and tenants detailing their rights and I’ve found it fairly easy to follow. It will explain in much more detail.

From my reading and speaking with an attorney (I’m not one, so this is not legal advice), you are allowed to raise rents 5% + inflation (which is measured by the CPI for last year ~1.6% I believe), so this year you could raise rents a maximum of 5.6% if my numbers are accurate.

You may evict a paying tenant only under certain qualifying circumstances. From what I remember: you can evict so you or a close family member can move into the unit (close family member is defined) or so you may do a major remodel or rehab of the unit.

You are also required to give them a certain amount of free rent as well as 60 days notice.