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Rent Control Strategies
Hi BP,
Wondering if anyone has suggestions for rent control units? Rent control Particularly in Oakland, California. I have a unit at an excellent rate, and like to get my other units that are at low rents to at least market rate.
Originally posted by @Matt Mason:
Originally posted by @Susan O.:
Originally posted by @Matt Mason:
Originally posted by @Susan O.:
Youre actually not allowed to do cash for keys in cities like LA. Possibly in other cities.
http://www.laweekly.com/news/la-moves-to-curb-cash...
They cracked down on landlords even offering as much as $75,000 to tenants to leave! it's like having to bribe someone even though it's YOUR property
Also if you want to be an owner occupier in LA you have to pay up to $22k in relocation fees.
If you try to give cash for keys you can get fined and open a lawsuit in a lot of cities with rent control. it's illegal under rent control rules.
http://hcidla.lacity.org/Relocation-Assistance up to $23k/ family for relocating older tenants
Yes, you can do cash for keys in Los Angeles. Not sure if you read your article, but it just discusses the fact that the cash for keys transaction has to be recorded with the City.
They actually don't let you raise it to market rents during a pay out or reloacation. So you can pay them out to use the ellis act and change the use, but you can't raise the rents for the existing units.
I've paid out a tenant $23,000 then I was not able to raise the rents. I had to keep the rents at the current rate based on the previous tenant.
If the tenant agrees to a payment and agreement to vacate their unit you can charge whatever you want on the re lease. If you are talking about Ellis Act or moving in as an owner then that would not apply as there are additional rules regarding that.
I know several people that buy out tenants, renovate the units and re lease at market rates in LA. It is done all the time.
Is that what was in the news when someone mention someone getting paid $80,000 for just one unit to move
http://www.latimes.com/business/la-fi-tenant-buyouts-20160919-snap-story.html
Originally posted by @Matt Mason:
Originally posted by @Susan O.:
Again. Nothing in there about cash for keys becoming illegal.
Well it looks like it's getting an overhaul statewide unless we do something about it. Here's a large tenant group that is funding smaller groups throughout the state
Originally posted by @Susan O.:
Originally posted by @Matt Mason:
Originally posted by @Susan O.:
Youre actually not allowed to do cash for keys in cities like LA. Possibly in other cities.
http://www.laweekly.com/news/la-moves-to-curb-cash...
They cracked down on landlords even offering as much as $75,000 to tenants to leave! it's like having to bribe someone even though it's YOUR property
Also if you want to be an owner occupier in LA you have to pay up to $22k in relocation fees.
If you try to give cash for keys you can get fined and open a lawsuit in a lot of cities with rent control. it's illegal under rent control rules.
http://hcidla.lacity.org/Relocation-Assistance up to $23k/ family for relocating older tenants
Yes, you can do cash for keys in Los Angeles. Not sure if you read your article, but it just discusses the fact that the cash for keys transaction has to be recorded with the City.
They actually don't let you raise it to market rents during a pay out or reloacation. So you can pay them out to use the ellis act and change the use, but you can't raise the rents for the existing units.
I've paid out a tenant $23,000 then I was not able to raise the rents. I had to keep the rents at the current rate based on the previous tenant.
That's just terrible!
has been postponed to 2018.
Whew!
Originally posted by @DG A.:
I'm a fan of moderate rent control.
I think if Oakland and San Francisco were a totally free market, there would be no one earning below ~$125,000/year living here. And that would mean, minorities (due to their income) would often not have the opportunity to live in and work in areas with a lot of job opportunities like the Bay Area.
I just made the transition from renter to owner, and if Oakland were a free market my rent would have jumped up by $1100/month in just one year.
As long as there's a time where the rent can reset to market rate, I think rent control actually drives property appreciation faster than it otherwise would.
The trick as an investor is to know the laws, and use the tools at your disposal to get your rents up over time. Tools like:
- Cash for keys
- Capital improvement cost pass thru
- owner-occupying small multifamilies
- buying properties with banked rent increases
- converting 2 small units into one big one
- rent control exemptions
What drives rents to the roof is regulation, not the lack of.
Rent control is not only idiotic but a real deprivation of owner's rights
In LA for example the bureaucracy and red tape for new constructions is such that it is often not worth the hassle for most developers. The city keeps feeding the urban sprawl, refuses to implement radical densification measures and rejects losening zoning regulation in the urban core. It's actually instead working hard at making the life of builders more and more miserable year after year. As a result, only a few new units come on the market every year in comparison with the population growth, constructions are taking forever, costs are over the roof; transfered to renters and home owners
Losen regulation and you'd have tons of new development, high density stuff everywhere and your average rent would be slashed by 70%. That's how you keep prices down, not by putting a gun on landlords heads
Landlord would suffer either way but at least prices would be back to fair value and there would be no housing shortage; there wouldn't be ridiculous artificial bubbles like in LA where land is extremely abundant and prices totally disconnected from reality . Law says you can only build a medium size sfr on an average size lot and then they wonder why the sprawl reaches the desert, and why the city is broke having to pay for thousands of miles of unnecessary public infrastructures