All Forum Posts by: Gary Pilkington

It's been like that for 6 years for me (East Sacramento to Elk Grove). Never any problem renting them out. I study current listings as well as rentometer and others to gage that I'm in a good zone and tend to list slightly higher than I would think and they go quickly. Many people interested are coming from the Bay area.

I'm in the Sacramento area. We started out using property management companies in 2015 mainly because I didn't want to deal with the day to day issues due to a demanding job. We just wrote checks for issues and received payments for rent and we were totally hands off.

Due to some communication issues, I was really in the dark about anything going on with the properties. Problems with PM communication (owner and tenant) seems to be a common theme.

I decided to make a change in 2019 and take over the PM duties myself. As it turns out, the tenants also experienced communications issues with the PMs and there was a fair amount of frustration on their part. We also found several problems with the properties that needed to be addressed that weren't communicated to us in the past.

We are very happy with our decision to take over PM for our properties and discovered that, in our case, we actually spend less time and money on the properties than when we had a PM with poor communication.

I'm sure there are great PM companies out there but, we will continue to manage our own properties. It's really not that difficult and, done right it doesn't take much time. The key is having systems in place for collecting rents, finding tenants and knowing how to market them and what to do with repairs. "The book on Managing Rental Properties" helped us to figure out our systems.

I have also seen great appreciation in value on my Sacramento area rentals and have thought about options as well. 

I feel that at least some of this is due to people moving eastward from the bay area now that we are moving to more of a work from home "norm". 

While I have not had difficulty in finding quality tenants quickly, I look at tenant change time as two things:
- A good chance to do some upgrades (add value) to the asset without working around a tenant.
- A good chance to market correct rent rates on properties that have had longer term tenants. 
The upgrades will play into the rent adjustment and I'm never down more than a month.

True, I may be navigating right into a tidal wave of change/uncertainty - depending on how far CA goes in making this more difficult on RE investors.

However, over the long term, I don't think I'm going to be losing value in the properties and will always be able to sell them. 

Longer term, having them completely paid off with a line on them for when the market corrects, to be able to deploy cash as needed makes the most sense in our particular (personal) situation.

I started off using a PM to manage our properties because I thought it would be too much to deal with while working full time.
My involvement was hands off completely down to just approving repairs and receiving rent. I started off with one company who was then bought out by another.

I thought I might be paying too much for repairs and rent ups etc. I was also frustrated by the lack of communication. As others have said, that is a real problem. After doing a little digging and reading "managing rental properties", I decided to try my hand and doing it myself. 

That was nearly three years ago.

Since then, I have landed some really good tenants, saved on repairs, and have a much better understanding of the status of my properties. I also actually spend less time on them, as I don't have the communication problems to keep following up on.
I do keep it completely professional and separate from my personal information. 

Once you have some basic processes in place, its actually very easy to do with a handful of properties and in my case, it takes very little of my time.

In the past, I have also used internet based security cameras and alarm system connected (along with signage) to a wifi hotspot (jetpack etc.) to do this after changing locks and better securing doors and windows. Yes, if they want to they can disable/remove it but, by separating them all, they will at least audibly deter them while recording them to cloud storage while they are doing it.

And, rental prices in the Sacramento area are up over 8% over last year.

There was a news segment on the local NBC station today saying that the rental prices are up sharply due to folks moving in from the Bay Area.

I'm in Northern California east of Sacramento. I think it also depends on the region and age group people are in as to trends.
Now that working from home is and probably will be the norm going forward, people are moving around within the state while, people nearing or in retirement who have built up their wealth (including real estate) are either looking at relocation out of the state or have already done so. There are a lot of boomers out there.

I know that people are moving out of some areas of the bay area and into areas like Sacramento and the surrounding areas for quality of living reasons.

It would be interesting to see statistics but, I think that boomers would be pretty high on the group who has left or will be. Mainly because of lower overall costs while getting a bump in standard of living in retirement. 

@Grace Esteban

I find I have plenty of coverage/replies with just three listings

Cozy.co - where I manage my rentals. I think they are also now apartments.com

Cozy syndicates to realtor.com and doorsteps.com

Zumper just to get listed on Facebook marketplace without tying back to your personal profile

Zumper syndicates to Facebook, padmapper and walkscore

Zillow.

Zillow syndicates to trulia and hotpads

I don’t know where it then gets syndicated out from there but, with these three listings, the property gets a lot of attention.

Working remotely will be more popular going forward - even after we have worked through the current virus situation (its now been more proven to work and is more accepted)

People will not be so physically tied to the Bay Area to be able to work for bay area companies - like tech and others

Reducing expenses will be on the top of peoples minds everywhere.

Moving to lower cost of living (and higher quality of life) while still staying in the state will be even more of a plus than it has been in the future.

As people sell in this area, others will be there to buy.

Not a crystal ball, just my opinion based on having rental properties in the area for a while. 

I'm a Sacramento County resident and investor with both SFH and Duplexes in the area. The answer is, it depends on your personal needs and goals. In my experience in this area, SFH have always beat the duplexes in appreciation. For more rental income per square foot, its easily the duplex. I would no longer put larger amounts down just to make the numbers work as you lock up too much capital for too long. What people don't think about is rehab costs and maintenance. These costs will usually be higher and more often in duplexes vs SFH. While the duplex does bring in greater income per square foot, there is also more turnaround than with SFH (people stay longer in SFH than in duplexes) and as such, there are more costs (vacancy, cleaning/repairs, marketing etc.) The other thing to consider is where your grandmother would be living in each scenario and if she is comfortable working with the tenant in the other side. For me personally and in my experience, I wish I had more SFH and less duplexes.