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:
CITY OF SAN DIEGO’S NEW TENANT PROTECTION ORDINANCE
Remember a few years back when the State passed AB 1482? The rent control bill? And what a game-changer that was!
Or the recently passed Senate Bill 567? Touted as the Homeless Prevention Act. This is a measure that strengthens the 2019 Tenant Protection Act bill. By capping rent hikes at 10%. Plus preventing landlords from evicting tenants with no legal reason.
Well, folks here’s another dozy. Especially if you own rental property in the City of San Diego.
It happened at the end of April. The San Diego city attorney drafted an updated citywide TPO. (Tenant Protection Ordinance) Then, Mayor Gloria signed into action becoming law. Just a quick disclaimer folks. We’re Not real estate attorneys. We are only going off our understanding of what we read. Based on that reading, you may need to hire an attorney. We’ve attached a pdf of the 28-page document. That way you’ll be sure you’re in full compliance when you do have evictions and “buyouts”. Which is the new term they are using now to replace “cash for keys” negotiations. Oh, and when you evict a tenant to do substantial renovations. Be sure to re-read and check off each step of what the new ordinance requires, you as a landlord, to do now.
Some of the new TPO highlights are:
• Any just cause no-fault evictions you perform now. Must be accompanied by a relocation assistance payment of 2 months’ rent. And if your tenant is disabled or over the age of 62… it’s 3 months’ rent in relocation assistance.
• It is now your responsibility to educate your tenants on their rights. Including their rights regarding relocation assistance. Their rights to negotiate or refuse a buyout. (formally known as a cash-for-keys agreement). And it’s your responsibility. To supply your tenants with the San Diego Housing Commission Tenant Protection Guide. All with your written notices to your tenants. Don’t worry, you can find the guide on the San Diego Housing Commission’s website.
• Your rental property business is now The San Diego Housing Commission’s business! You are now required to report all your evictions to the San Diego Housing Commission. The housing commission then establishes a submission portal. Plus provides the public notice of its creation.
This ordinance is no joke. It’s difficult to read. And it is very detail specific. With processes, timeframes, and even the size of the font for your tenant notices. Putting the liability on you as the property owner. If you don’t follow their directions exactly how they have them spelled out, well, you become liable.
For your protection, click the link and read the document for yourself. The first ten pages are the history, reasoning, and definitions. The meat and potatoes start on page 10.
Please read it, even if your investment property isn’t within the City of San Diego. We’re willing to bet it’s a matter of time before this new ordinance gets adopted in some of the surrounding cities too. Guys you already know, over the past several years. Assembly bills, senate bills, and ordinances like this have passed. Statewide all over California. Not one with a public vote. So it’s safe to say things will continue to trickle down the pipe. All favoring tenant rights over landlord rights.
Now, for those of you who are only starting out on your investment journey here in San Diego. This is the exact kind of need-to-know information you’ll want to keep up with. These fast-coming changes will impact how you run your small business. The business of being an investor, landlord, and property manager.
Now, for you seasoned and established investors that have been doing this for a while. The question might be… How soon do you want us to put your property on the market? You know, it’s not too late. We are still in a ridiculously high seller’s market for multi-units. It’s not just condos, townhomes, and single-family homes that are in high demand. You can sell in this strong sellers’ market for a record-setting price. Then roll your proceeds into a 1031 exchange. There are greener pastures in more landlord-friendly states. Along with other types of investment property. Seriously, give us a call! We can talk about your exit strategy. There are lots of solutions out there. DSTs, triple net leases, or just simply diversifying into more landlord-friendly states.
AND WHEN YOU’RE AT THE END OF THE GAME… READY TO RETIRE FROM LAND LORDING?
Let’s face it. Being a landlord has its ups and downs. If we had to point you in one direction it would be the Delaware Statutory Trust folks. And here’s why. With the DST, you get all the benefits of ownership. Without the hands-on day-to-day dealings of tenants and property management/maintenance. First and foremost, you get cash flow. And in a lot of instances, it’s even more than the relinquished property provided. Second of all, you’ve got professional management and bookkeeping. It’s automatically done for you. We’ve touched on DST options in the past. Don’t be shy, contact us.
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IT’S TIME FOR YOU TO GET THE ROI YOU DESERVE
You’ve worked hard for what you’ve earned, and you’re right to want the best experience. Be confident you have professionals on your side. We use ROI-based marketing. Rest easy knowing we use an organized system to market your property. Employing our highly targeted and proven approach like no one else is what you deserve!
Thinking of selling your property in the next 12 months? Call us today for your strategic marketing consultation at 858-218-4511.