Rent control - crushing it

[Karen L.]

Salutations, 

I'm curious if anyone is crushing it in a rent control market with MFU (duplex, triplex, quadplex, etc).  Rent caps and just cause ordinances make it intimidating to enter markets where these restrictions make it challenging to be a landlord. The SF and San Jose markets are great examples of this.  In fact, there is a great concern with the California Assembly looking to make SFUs subject to rent control too.  This will be reviewed within the next two years. 

Is it worthwhile to even consider a MFU in a rent control market, or potentially state? 

Karen

[Thomas S.]

I operate in a rent control market and there is no way rents keep up with costs. The bane of the business is long term tenants. Contrary to the norm, under rent control, you do not want long term tenants. You will fall behind ever year and will hope and pray that tenant do not stay any longer than 3 years otherwise you begin to lose money rapidly.

Tenant turn over is essential for success in a rent controlled market coupled with a business plan to insure quick turn around of units.

The bigger issue is that in a rent controlled markets the courts will be extremely pro tenant. Rent control is only the beginning of your problems. Your tenants will be in control of your investment for the most part.