In the Bay Area, rent control is not a one-size-fits-all concept. Regulations vary city by city, and as a property owner, it’s vital that you know which ones apply to you. Here’s a rundown on rent control in some of the largest Bay Area cities.
Rent control covers most San Francisco tenants. The annual allowable rent increase for the period spanning March 1, 2017 to February 28, 2018 is 2.2 percent. Moreover, tenants covered by rent control may only be evicted for just cause, which includes nonpayment or habitual late rent payment, nuisance or substantial building damage, or demolition of the building.
Other major components of San Francisco rent control include:
• Landlords are eligible to petition for other increases such as capital improvements, which can be passed on to a tenant for a maximum increase of 10 percent.
• Tenants can petition the San Francisco Rent Board for decreased rent if the landlord fails to provide services that are either legally required or mutually agreed upon – for example, utilities, parking, or storage space. Likewise, they can petition for lesser rent if the premises are not maintained as safe and habitable.
Like San Francisco, Berkeley’s rent-control ordinance regulates residential rents and requires landlords to only evict for specified good-cause reasons. Most buildings with two or more residential rental units or more that were built before June 30, 1980 are covered; in addition, tenants of single-family homes have both rent control and eviction control if they have lived in the unit since January 1, 1996.
The types of units that have neither rent control nor eviction control include:
• Units in a two-unit property where one unit was owner occupied on December 31, 1979 and one unit is currently owner-occupied.
• Units where the tenant shares a bathroom and kitchen with an owner who maintains the unit as his principal place of residence.
Oakland tenants living in buildings with two or more units built before 1983 are covered by rent control, with the following exceptions:
• Those who rent a unit in a single-family home or condominium unit from the owner.
• Those who live in a two- or three-unit building with a landlord who has lived in one of the units for more than two years
• Those living in any form of government subsidized housing – however, this category may still be covered by the Just Cause for Eviction Ordinance.
A landlord who owns at least five units in the City of Hayward – any kind of common ownership and any percentage of ownership – falls under the Hayward Residential Rent Stabilization Ordinance.
The following units are not part of rent control:
• Accommodations in hospitals, extended-care facilities, and dormitories.
• Publicly funded housing projects.
• All units built after July 1, 1979.
• Accommodations in motels, hotels, inns, tourist houses, rooming houses, and boarding houses – unless occupied for more than 30 days.
• Cooperative housing owned by a majority of the residents.
In July 2017, the Fremont City Council backed away from pursuing rent-control laws similar to the rest of the cities listed above. However, there are three ordinances that may be considered applicable:
• Affordable Housing Ordinance, which fosters adequate amounts of housing for people at all economic levels.
• Mobile Home Rent Stabilization Ordinance, which limits rent increases at mobile home parks to one per year.
• Residential Rent Increase Dispute Resolution, which applies to all housing units and provides steps that can be taken to resolve rent-increase disputes.
You can handle your property on your own … right? Perhaps not. Turns out we all need a helping hand, and unless you as an owner want to spend far too much time managing business matters, it’s time to hire a property manager.
With homeownership at 63.5 percent and slowly decreasing over the last decade, according to a 2016 Real Trends presentation by Steve Murray, steady nationwide rental growth is putting upward pressure on the need for property managers.
Here are a few other reasons you need a property manager:
Savvy investors know when to outsource. Property management is one of those jobs.
If you’re trying to keep your rental property occupied year-round, consider taking some inspiration from your favorite small businesses. After all, they have learned to be detail-oriented and thorough when it comes not only to purchases and staffing, but also with their time and effort. Lift a page from their book and you’ll see your business take a decided leap upward.
Hire the Right People
Many small businesses make a practice of hiring freelancers to tackle specific business-related tasks. A few such freelancers who may be applicable to property management are:
• Property management service companies are your go-to – particularly when you don’t live in the same area as your rental property. Such firms are qualified to manage all tenant-related responsibilities, guest experiences, and maintenance issues.
• Professional photographers who can provide high-quality shots represent a small investment that can pay off big going forward. Make sure you trust a photographer’s artistic sense and judgment and they’ll become a major tool in your arsenal.
• Maintenance professionals and contractors can handily take the place of a full-time staffer dedicated to upkeep. Sites such as Craigslist and Angie’s List allow you to post jobs and also hire professionals for tasks such as cleaning, plumbing, and installations.
Does It Add Long-Term Value?
With every new element you add to your rental property, you’re making a long-term investment. It’s therefore important that you make purchases mindfully in order to be certain that you will see a return on the investment.
Here are a few questions to ask yourself when considering a purchase for your rental property:
• Does it add long-term value?
• Will guests use it?
• What costs, if any, will be added as a result? These include insurance and taxes.
• Are extra costs worth it to you at this point in the game?
• Does this investment have a high upside?
Other Tips and Tricks
Here are a few other ideas used successfully by small businesses – and these ideas can translate beautifully into owning and managing a property:
• Consider converting one room in your rental property into office space to diversify possible uses – and consult your property manager for the legalities surrounding this move.
• Use online tools to handle your web presence, thereby freeing you up to pursue more property-specific tasks.
• Automate your redundant tasks such as updating online calendars after a booking, sending emails to guests upon a booking, and updating listings and availability calendars on various outlets. Many if not most of these tasks can be handled by vacation rental dashboards.
Your property is your small business. Treat it as such!
As a property owner, you’ll find your tenants a main priority – and occasionally a source of stress. Given that you’re counting on your tenants in many ways – primarily to pay the rent so that you can in turn make the bills – it’s key to keep your tenants satisfied. Here are a few tips on doing just that.
Maintain Open Communication
Swing that door wide and allow your tenants to communicate freely with you. Address all problems quickly – that includes repairs – and don’t hesitate to answer the phone and/or respond to emails promptly. Your or your property manager should make it a priority to respond to tenants within 24 hours at latest.
Don’t Dilly-Dally with Deferred Maintenance
Tenants should know that you’re committed to keeping your property in good shape – and, in fact, this will often entice them to stay longer. Make yourself available for maintenance requests and handle them in a timely manner, while at the same time making cosmetic improvements such as a paint job and professional carpet cleaning on a reasonable schedule. Finally, take your time getting the right furnishings for your property – in the end, this will cost less than having to keep fixing old ones.
Think about the qualities you’re seeking in a tenant – respectful, responsive, and mature – and know that they’re likely looking for the same in you. A little friendliness and flexibility will go a long way in establishing professional demeanor and a good landlord-tenant relationship.
Promptly Deal with Disruptive Tenants
There’s always that one rotten apple. If you’re a landlord long enough, you’ll find it – but you can mitigate the damage from a difficult tenant. Nothing pushes away good tenants more quickly than an obnoxious neighbor who stomps on the floor, yells incessantly, and thinks nothing of playing the drums at three in the morning. Don’t let that happen.
Let Tenants Know They’re Appreciated
Without overstepping boundaries, it can be touching for one’s landlord to be considerate and thoughtful. A holiday card, for example, is a small sign of appreciation that will be remembered.
There are two words that can cause huge headaches in the world of property ownership: deferred maintenance.
Essentially, investors and property owners often do not spend a sufficient amount to make crucial repairs and renovations – which in the long run can become more troublesome than simply keeping up with maintenance over time.
However, maintenance issues are far from the only misstep seen in this circumstance. Making a good living off real estate in any economic environment requires avoiding the classic mistakes that all too often see the light of day. Here they are, and though there won’t be a test at the end, you still get credit for taking notes.
Here’s the bottom line: research is key before investing in property. Give it short shrift and you’ll feel the pain down the line.
Written by Allison Landa
One major upside to property ownership is the power of tax deductions and write-offs. Did you know, though, that there are deductions and write-offs that extend far beyond the traditional ones such as mortgages? Let’s explore.
Renewable Energy Efficiency Property Credit
Your bottom line may benefit from installing home equipment that harnesses renewable energy sources such as wind and sun. Provided you installed said equipment by the end of December 2016, you are eligible for this tax credit to the tune of as much as 30 percent of its cost, including installation. The Solar Energy Industries Association finds that about 700,000 American homeowners have installed solar equipment since 2010, making this credit ever more popular as time goes on.
Residential Energy Credit
Likewise, if you have worked to make your home more energy-efficient through installing new windows, asphalt or metal roofs, insulation, storm doors, heating systems, or air conditioning, you may be eligible for a tax credit up to $500. The credit has been extended through year-end 2016, and not taking advantage of it is tantamount to leaving money on the table.
If you have exchanged property held for use in trade or business, or held for investment for a like-kind property also to be used for such purposes, you may qualify for tax deferment under Section 1031. Such an exchange may constitute something as simple as a property swap, delayed exchange, or simultaneous exchange – but beware as it can get more complicated from there.
Property Tax Deduction
You’re entitled to deduct real estate property taxes on Schedule A. You’ll find this amount on your annual escrow statement if you have a mortgage with an escrow account. In addition, if you bought a home this year, consult your HUD-1 settlement statement to confirm if you paid any property taxes when you closed on the home – these are deductible too.
Charitable Contribution Deduction
If you itemize, you will be able to deduct charitable contributions or money or property made to qualified organizations. You’ll typically be able to deduct as much as 50 percent of your adjusted gross income, but some cases limit that amount to 20 or 30 percent.
Written by Allison Landa
What homeowner doesn’t want his or her property value to go up?
Question is: what are the smartest ways to make this happen? In answer, we present 10 wide-ranging, comprehensive ways to bolster that value in the most efficient way possible.
• Come hither, curb appeal. How does your home look to a prospective buyer? To get a fresh set of eyes on the situation, look critically from all angles. Keep the following in mind: accentuate the positive, eliminate the negative. Those aren’t just song lyrics. They’re good advice.
• Emphasize energy efficiency. Get an energy professional to do an audit on your home, then follow his or her recommendations. They may include plugging leaks, shoring up insulation, sealing ducts, or installing a programmable thermostat to make climate control more efficient.
• Pull out the paintbrush. You’d be amazed what a fresh coat of paint can do for the appeal of your home. You might also try refreshing your cabinets with a faux-wood finish – simple and effective.
• Prioritize property care and maintenance. It’s simple logic: a house that is properly maintained will not only show better, but sell more quickly and with fewer hitches. The idea of properly caring for your property touches every aspect of the home, from the insulation in the attic to the grass in the front yard. A simple rule of thumb: if you think it needs to be fixed, it does.
• Maintain rent at market levels. This is as key to maintenance as unplugging toilets or replacing kitchen fixtures. Your property value is largely determined by the amount of rent that is collected. Don’t cheat yourself.
• Cleanliness counts. Your place may look good to you, but look again with a set of fresh eyes. Do you need to scrub the tub? Declutter the living room? If you need to bring a friend in for an objective perspective, do it.
• Remodel in a reasonable manner. Make upgrades based on intent, not impulse. Ballpark costs should be around 20 to 25 cents on the dollar, with the rest going directly toward increased home value.
• Smart small. Little steps can you take far if you persist. Try making two lists: upgrades you want to make for yourself and those that will add to your home’s value. Try doing a little bit of both through a methodical approach and you’ll be surprised at the results.
• Go room by room. Take that methodical approach a step further and work one room at a time. This not only keeps your improvement projects manageable, but it will likely spare your sanity.
• Kill ‘em with kitchen kindness. The kitchen is the number-one place where you’ll see return on your investment, so make it a priority. Some design suggestions: a mobile center island, stainless-steel appliances, and install a pot rack and wine-bottle holder. This presents a mix of the practical and the pretty – and the combination works.
Don’t be daunted. Take it one step at a time and you’ll succeed!
Written by Allison Landa
With the East Bay Municipal Utility District board’s recent decision to raise water rates by 19 percent over the coming two years, there’s never been a better time to concentrate on minimizing your water consumption.
Let’s look at a few methods to help you turn down the tap while at the same time continuing to maintain your property in top shape. Yes, it can be done.
Remember: conservation isn’t simply about saving money. It’s about saving precious resources. We can and should all do our part.
Written by Allison Landa
When staging a home, how much of it really matters?
According to a study from National Association of Realtors, 62% of sellers agents say that staging a home decreases the amount of time homes spend on market.
Not only does staging decrease time on market, it can actually increase your property's value by as much as 10%.
Staging a property allows potential buyers to get a feel for home. Every visualization and opinion of a home begins with how the home is staged, and appealing to the largest number of potential buyers is crucial.
The living room is the most important room in a stage. After all, this is usually the most commonly used room, followed by the kitchen and master bedroom. The yard and outdoor space are close behind while the guest bedroom is considered the least important room.
Beyond staging, there are some common home improvement projects that benefit any property going on market. For example, decluttering and cleaning the entire home is highly recommended. Other small projects include depersonalizing the home, removing pets, and making minor repairs.
If San Leandro, CA hasn't been on your radar lately, it's time to add it.
Economic and Area Data
- Retail and Commercial Vacancy rate has decreased from 3.8% in 2010 to 2.2% in 2015
- Rental rate has increased from $5 per square foot in 2010 to $8 in 2015.
Since 2010, there has been a noticeable shift of more businesses moving to the area, resulting in less vacancies and higher rent all over. It's a good sign of growing value in San Leandro.
Points of Interest
- New San Leandro Tech Campus brings small tech boom in San Leandro
- New Kaiser Permanente in San Leandro beings more employment in healthcare.
- San Leandro Beer Craze with Drakes, Cleophus, and new 21st Amendment Brewery
Since 2014, new businesses have been opening in San Leandro, creating more jobs and buzz about the city. Opportunities in Healthcare, Tech, and culinary scene are driving more interest into the city. This is adding on to many other points of interest, such as BART, Marina shopping outlets, and Costco among many others.
Moreover, San Leandro offers some of the highest fiber internet to businesses, ramping it up to 100 Gigabytes per second. It's also known for its food operations for companies like Ghirardelli and Coca-Cola.
What are your thoughts about San Leandro?