“A fine is a tax for doing something wrong. A tax is a fine for doing something right.” Anonymous

In California, housing providers are saddled with a statewide rent control, along with additional laws which make it more difficult to operate buildings, and especially when it comes to evicting problem tenants or raising rents to market value.

We do have one valuable too that other states do not and that is Proposition 13.

PROPOSITION 13 Was enacted in 1978, which is when I went into real estate full time. It has been the “gift that keeps on giving “for multi-family investors and homeowners alike. Born in Magna, Utah, Howard Jarvis came to California in the 1930’s.He was a colorful character who died in 1986. Seeing the jump in property taxes, he pushed for the passage of Proposition 13, which would cause values to be determined by value at the date of the last sale. There can be raises in property tax of no more than 2% of the actual tax amount per year. This system is miles ahead of most other states.

OTHER STATES Most other states reassess their properties at will. I once owned a 10 unit building in Las Vegas and it was reassessed during my tenure causing my expenses to increase dramatically. Along with the ability to reassess properties at will, other states are not subject to a maximum raise of 2% of the prior tax bill, as we are in California. States like Texas have a 2.5% property tax and there was talk recently about raising taxes to 3.5%. This would be catastrophic for multi-family owners.

HOWARD JARVIS TAXPAYERS ASSOCIATION Even though Jarvis died in 1986, the Howard Jarvis Taxpayers Association (HJTA) is still active today. Ballotopdia lists their stances on issues from statewide rent control (AB1482) to the death tax. As a multi-family owner and a housing provider in California, you should follow their website (www.hjta.org) to keep up on issues that affect you and your investments. Along with your Apartment Owners Association, they are looking out for you and might make you aware of some pending legislation that you may have missed.

“Success is a result of constant practice of winning skills and actions. There is nothing miraculous about the process. There is no luck involved.” Bill Russell

What we at PRS PROPERTIES CAN DO. We can give you a good idea of the current value of your building. We can suggest changes you might want to make before sale to give you an idea what type of building you would be able to exchange into. You may decide to stay in the rental business. We are always available to chat. We can give you referrals for professionals, such as lenders, contractors, and engineers, so that you can decide who you feel best with. We can supply you with rent and sale comparable in the area of your properties, so that you know what rental values are in your area. It is important that you know the true value of your rental units, so that you can get them rented right away at market value, or at least as much as possible with rent control restrictions. We can look at potential purchases that you may be interested in to make the property more desirable, and maybe look at potential issues that an insurer might require you to repair.

If you should decide to sell your building, we can help you exchange into a larger or smaller properties. We can even help you move into something with less management responsibilities. We can also help with getting the paperwork together for a refinance if that is your desire. We can also recommend experienced licensed contractors who can perform any repairs or installations you may need prior to selling. We can also look at your building for other easy and inexpensive changes that might allow you to get a higher value. We can help you to get the maximum value for your property, should you decide to sell, or the maximum return if you are planning to keep your building.

We are currently looking for “as-is” properties and are willing to purchase with low rents, deferred maintenance or even with a problem tenant in place. We can offer a 7 day escrow and all cash at closing. Give us a call. We have also put together numerous transactions over the years which involve properties that are not listed for sale. Many investors are currently in 1031 exchanges and need to identify a replacement property before their 45 day identification period runs out.

Should you decide to put your property on the market, we will put together an aggressive, targeted and professional campaign to get your property sold fast. We have been doing this for over 40 years, and we will use all the tools available to bring you the most dollars at closing. If you are thinking of selling or are just curious about the value of your property, don’t hesitate to give us a call.