“Price is what you pay. Value is what you get”. Warren Buffet

It’s time to raise rents for 2026 if you haven’t already. The maximum raise for this year is 8% which is down from last year when it was 8.8%. This number will be good until August of 2026, when a new CPI (consumer price index) will be issued.

HOW IS IT DETERMINED? Under the Statewide rent control legislation passed in 2019, the maximum allowable rent raise is 5% plus the CPI (consumer price index) a number which comes out in August. The last one was 3% which, when added to the allowable 5% give us an 8% raise.

CAVEATS Make sure you are using the correct CPI for the county where your apartments are located. This can vary so make sure you get the right one. If you are not sure, check with your Apartment Association or give me a call at 714-328-0832. Additionally, this is for buildings over 15 years old, which are not single family homes or condominiums and not owned by a corporation or an LLC. If you meet all of those criteria, you may not be subject to AB 1482, but be sure to check before you exceed the allowable increase. A violation of AB1482 could cause you to have to refund money or it could even cause a lawsuit from one of your tenants, not to mention some ill will.

DO YOU GET THE 5%? many areas such as West Hollywood, City of Los Angeles, Unincorporated County of Los Angeles and Inglewood have their own laws. If you are in one of those areas, you may not get the 5% and you may be limited to the percentage on the CPI. Be sure you know that there have not been any changes since your last rent raise.

NOTICES You can get your NOTICE OF CHANGE IN TERMS OF TENANCY forms from your Apartment Association. If the raise is less than 10% (as it will be in this case) you can use a 30 day form, but I like to use 60 and I usually give out raises after the 15th of the month, or after the previous months rents have been collected.

DON’T LET IT GO BY. Rent control regulations are getting more strict, so you may get a smaller raise next year or there may be a moratorium on rent raises altogether. Your income and the value of your building, as well as your appraisal value if you decide to refinance, could be affected by your total amount of income.

“Work like someone is working 24 hours a day to take everything away from you.” Mark Cuban

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.