Dear Landlords and Investors,
The principles of leverage, supply, demand, and ROI still push appreciation. San Diego has proven to be a wise location for your investment dollars. But, don’t become complacent. Don’t lose track of why you are investing, regardless of how successful you are. Dealing with unexpected issues can make or break your business. So of course, you’re right to want to understand how the current market affects your property values. You deserve expert guidance. Here are details on what you need to know now:
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AB 2710 Was Stopped! And thank goodness it was. It was derailed by 2 organizations. Both, The California Association of Realtors and The California Apartment Association helped. This was yet another anti-landlord bill. Designed to force rental owners to give advance notice to “qualified entities”. This would be prior to listing their properties for sale. Entities such as; tenant organizations, community land trusts, and affordable housing non-profits. These entities would have then had the first right to purchase. Plus they would have received excessive time, nearly one year, to secure financing. Imagine the hurdle this would have created for owners? All those wanting to put their properties on the market would have to jump through?
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The Market Shift. It has now shifted into the 2-4 units market as well. As of today, Friday, May 13th you have 140 currently listed 2-4 units on the market in San Diego County. Of those 50 are new to the market in just the past 2 weeks. So we are seeing more inventory. Of the 140 listings, 33 have taken price reductions! And 20 of them have come back on the market since April 1st. Rates are now at 5.5%. The changes we noticed in the residential housing have taken shape in the 2-4 unit market as well. Especially price reductions and back on the market listings. We haven’t experienced them since before the pandemic.
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AB1482 governed rent increase for this year.This is the rent increase decree from our friends in Sacramento. It was their effort to help tenants. Total back fire. If you remember, this is how it works, beginning Aug. 31, 2020. Rent increases taking effect before Aug. 1 of any calendar year, will have to abide by the following. AB 1482 uses the data issued by the U.S. Bureau of Labor Statistics for the CPI published in April of the prior year. If the April number is not available for the geographic area. Then use the CPI published in March of the prior calendar year. (You may need to re-read that to get it.)So the CPI figure from April of 2022 applies to rent increases that take effect between Aug. 1, 2022, and July 31, 2023. Increases that take effect before Aug.1, 2022, are to use the April 2021 CPI.That last paragraph is what folks should pay attention to. They should plan their annual rent increases to be after Aug 1st each year. This allows them to use the published CPI data from April of the same year. Looks like this year the clause of lesser or 10% increase applies. CPI for SD county was a bit over 8%. That would be a 13% increase. Don’t use 13%, use 10% or less to be on the safe side.
Bookmark-Worthy Links
San Diego Real Estate YouTube -Weekly Videos Keep You Connected
Rentometer -House and Apartment Rental Rate Comps
HomeBot -Personalized Home Finance Tool
ALTOS Reports -Powerful Data-Driven Real-Time Zip Code Market Updates
MLS Access for Investment Property -Custom Searches For Investment Property
San Diego Apartment Investors Market Report Archives -Access Past Market Reports
IT’S TIME FOR YOU TO GET THE ROI YOU DESERVE.
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