We have Proposition 13 in California so our property taxes only go up 2% a year (unless a major renovation is done where you would be reassessed) but you're dealing with higher prices like you said.

A GOOD tenant has choices, you want to look at your value proposition to them.

I think what is becoming more and more important is having a solid investment thesis and understanding of your target market and the value proposition you are offering to your customers through your properties. 

Considering your idea of a 12-plex in Oakland for around $2.2 million, it's an intriguing proposition.

I always consider the value-proposition I offer nicer rentals because I want to attract and KEEP good tenants.

On the other hand, with the passage of proposition 19 a few years ago, the properties will be reassessed upon death and that will result in higher property tax expense going forward.Final thought: There are very few Californians who are happy they sold a property in the last 10-30 years.

For instance, selling a $50,000 house and making $1,500 is not a very attractive proposition for an agent, but selling a 1 million house and making 30,000 seems kind of unreasonable as well.

Like others have mentioned, you will pay structurally more for a home warranty than self-insuring for the cost of repairs.This may be worth it if the value proposition was that you could be hands-off whenever a covered item breaks.In reality, it adds significant overhead because there is the claims process and you give up control of the repair timeline and quality as you have discovered.

When I went to collect the rent for the first time from a long-time tenant (she had lived there at least 15-20 years and raised her children in the house,) she said she had a business proposition to discuss with me. 

Beyond price, I look carefully at the value proposition I offer.