“Nothing is so permanent as a temporary government program.” Milton Friedman

Efforts of housing providers along with California Apartment Owners Associations have allowed us to maintain the rent control; mandated under AB 1482, which limited the amount rents can be raised in California, but a temporary triumph does not mean the bill, under another name can’t come back next year.

AB 1157 This bill would have reduced the basic allowable rent raise to be 5% including cost of living adjustments, This legislation would have put the cap for cost of living increases at 2%, regardless of the actual percentage and it would have capped the total allowable raise to 5%. Currently under AB 1482, a raise of 5% is available along with the cost of living. The maximum raise is currently 10% per year. Recently, the cost of living has been 3.8 and 3.9 percent giving us allowable amounts of 8.8 and 8.9% Many landlords who didn’t do annual rent raises for a number of years found that they were substantially under market value, and it would take many years to catch up.

NO GUARANTEE We have seen a number of pieces of legislation in the last few years looking to further stifle the ability of housing providers to offset the rising cost of repairs, mortgages and most of all insurance premiums. This is especially a problem for “mom and pop” landlords who have only a few units, usually used for their retirement income. Now is the time to look for the best deals from vendors, or in many cases do the work yourself.

The rental business is an ever changing business so it is important, even more than before.

WE NEED MORE RENTALS, NOT LESS. We all know that imposing additional restrictions on housing providers will create less housing. Investors will choose a different investment, such as stocks and bonds, commercial and industrial real estate, including triple net leased properties and group investments such as REIT’s, UPREIT’s or Delaware Statutory Trusts. Additionally, builders will spend their dollars building homes and condo’s instead of multi unit buildings. Additionally, some investors will just take some or all of their rental properties off the market altogether. I believe the best idea for housing providers is to navigate the changing rules, and keep current on pending legislation which affects your properties.

“It ain’t fun, but if you watch me, I’ll get it done.” Jackie Robinson

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 or you may want to move into a more passive real estate investment, such as a triple net or a DSL.. 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.