“The measure of intelligence is the ability to change.” Albert Einstein

The definition of a “mom and pop” landlord may vary depending on who you ask, but if you are one, you know it. The vast majority of rental housing providers in California own 10 units or less. You may own 20 units, maybe a couple of four plexes, or maybe just a rental house. In each of those cases, you feel the sting of many of the new regulations and wonder how you will keep going.

WHY BECOME A LANDLORD There is the old Mark Twain saying “buy land, they aren’t making it anymore.” In most cases, landlords are playing the long game. Most are planning to pay off their rental properties over time and use them as an integral part of their retirement income, along with social security and maybe a pension. They may then leave the property to their heirs. There are some tax advantages to owning property and being a housing provider helps the community with a desperate need for housing at the same time.

OBSTACLES Lately, landlords have been faced with a number of new restrictions , which are obstacles here in California. There is rent control (AB 1482) which has limited our return on investment, and in many cases reduced value. There are new requirements like limiting the security deposit to equal one months rent, a restriction on even asking about pets, there is the new law prohibiting pet deposits to name a few. The exit of many insurance companies has made premiums much higher and the cost of goods and services in general has skyrocketed. Our income is being limited as our expenses keep increasing.

WHAT TO DO It is now more important than ever to stay abreast of any new legislation which is detrimental to housing providers, like Prop 33, the “Justice for Renters Act” which will be on the November ballot. It is bad for housing providers and will discourage investment in rental properties as well as new construction of multi unit buildings. Now is the time to make sure you are in compliance with all the new laws, join the Apartment Owners Association, shop for the best deals on good and services and look to reduce any waste. Property is still a great investment, but the rules are changing.

“A champion is someone who gets up when he can’t” Jack Dempsey

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.