Quote from @Becca F.:
Quote from @Mike Paolucci:
Quote from @Becca F.:
I'm a new investor (2019) with 2 properties (1 SFH solely owned and 1 apartment building, co-owned with family) in the Bay Area. I've also been investing in the Indianapolis area, more for cash flow and tax benefits (may be able to get REPS status by logging my hours but that's another topic). The appreciation on the CA properties far surpasses the Indiana ones. I've talked to several people and am aware that I could 1031 my Bay Area SFH with lots of equity to buy a multi-unit or many SFHs in the Midwest and possibly generate more cash flow. I don't plan to do that. I would rather own fewer solid properties than 50 or 100 cheaper properties.
I hear a lot about California being a terrible place to invest with landlord tenant laws. I haven't heard lots of horror stories, just mostly in Alameda County specifically with the COVID moratorium. One San Leandro landlord is owed $132,000 in back rent and in Oakland you can't discriminate against rental applicants with a criminal back ground (except sex offenders) and several stories of non-paying tenants which took thousands in legal fees to evict in Oakland.
I'm interested in hearing from other CA investors, especially in the Bay Area. I've talked to a couple people successfully flipping here and doing BRRRRs. For long time investors who bought they're able to charge market rate rent and have relatively low monthly payments, either paid off property or low property taxes from Prop 31. For newer investors, they seem to be very high income earners (tech workers, physicians) or have lots of capital but it's tougher to buy here without a lot of money.
If your a CA investor and 1031'd your properties to buy out of state, would be interested in hearing your experiences. What are your horror stories or success stories?
I was born and raised in San Francisco and did some property management for my cousins in North Beach and have no real desire to be a landlord in SF or CA in general.
There is a piece of legislation on the November ballot for San Francisco (not sure if it'll be for the whole state) that says that even if a tenant leaves voluntarily, you will be required to market the rental for the same amount that you were previously renting for and will not be able to ask for market rents.
Additionally, if you choose to occupy your rental property, and need to get tenants to move out, you'll likely need to Ellis Act the property which you'll need to pay tenants upwards of $35k+ per person to relocate and will eliminate your ability to use it as a rental for up to 10 years. Not exactly something I would want as a landlord.
When it comes to Midwest investment opportunities (Ohio markets), I'm able to still have rights as a landlord that will not hinder my ability to maximize ROI with little govt interference.
Could you please cite the source of this proposed legislation? I typed in variations of "rent increase, proposed legislation for 2024 for San Francisco" in Google and don't see anything saying a landlord can't increase a property to market rent on a new tenant after the previous tenant moves out.
I talked to 2 PM companies in S.F. and they both said I could rent out a SFH at market rate rent if my current tenant moves out (family member who is getting a deal). On the apartment building, a tenant moved out and the PM company advertised it for market rate rent. From Feb. 1, 2023 - Feb. 29, 2024 rent could be raised 3.6% on rent controlled units on existing tenants. Starting on March 1, 2024 it's 1.7%. So far I haven't had any issues with these tenants - they're either high income earners or long term tenants who take care of the units. All paid rent during COVID.
With my Indiana properties even though it's landlord friendly, I've been taken advantage of financially by several people (not the tenants) being 2000 miles away (a long story). I don't plan to buy anymore OOS properties for a very long time especially at these interest rates.
I know about the Ellis Act but I highly doubt that I would move back into my rentals. I'll move to Nevada before that happens lol
@Becca F. see link --> California Prohibit State Limitations on Local Rent Control Initiative (2024)
It was proposed as Prop 10 back in 2018 but did not pass. As of right now, the property managers are correct, you can still get market rents for new tenants.
However, if this legislation passes, it could "abolish the state's existing ban on vacancy control. Vacancy control prohibits rental housing providers from adjusting rents to market rates when a tenant moves out. Such a policy leads to property deterioration and stifled investment in housing."
When it comes to the OOS investing, I can't speak to Indiana and teams you have in place there. Sorry to hear about that. What I can speak to, however, are the teams I have in place here in Columbus, OH. I've worked with them since I started investing while living in San Francisco back in 2021. I've been pretty happy with my experiences so far. I know at least 3 other bay area investors who I've referred my team to and they haven't given any negative feedback.
