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:
Decks, Balconies, and Walkways OH MY!
Must be inspected by January 1st, 2025- Senate Bill 721
Senate Bill 721 affects buildings with 3 or more multifamily dwelling units. It mandates safety and inspection standards. Only for a building’s, exterior elevated elements (EEEs).
According to the bill, EEEs include stairways, porches, decks, and walkways. And other elevated structures more than 6 feet above the ground.
Specifically, SB-721 focuses on wood-framed structures and requires inspections every six years.
Here’s a breakdown of some of the bill’s key points:
- The first SB-721 inspection must be completed by January 1st, 2025.
- On larger sets of units, a certified independent inspector must inspect a minimum of 15%. Of each type of elevated element (decks, porches, stairways, and walkways). The inspector gets to decide which elevated features to examine.
- The property owner must correct any exterior elevated element. Any that requires repair or replacement is called out in the inspection.
- The more serious the structural issue. The sooner the building owner must complete repairs.
- Local building departments can assess penalties. Penalties up to $500 per day for non-compliant facilities.
- Re-inspections must occur every six years.
- If officials in the jurisdiction request the reports. Then the building inspector is legally required to make them available.
- Property owners are responsible for continued and ongoing maintenance.
The requirements of SB-721 inspections are as follows:
- All SB-721 safety inspections must be completed by safety inspectors. Inspectors who are qualified under the provisions of SB-721. These professionals include general contractors with “A,” “B,” or “C-5” license classifications. With at least five years of experience. Architects, engineers, and certified building inspectors are also allowed.
- The inspection reports must meet three specific requirements. They must outline the current condition of the EEE. Specify the expected service life of the elevated element. And provide recommendations for additional inspections if the inspector deems them necessary.
- Inspectors must deliver their inspection reports within 45 days of the inspection date.
Learn more about SB-721 in our blog by clicking here.
How We’re Complying With SB-721
As many of you know, Lyle owns a 4-plex in Escondido. This street has 16 4-plex buildings in total. And the owners came together years ago and formed an HOA for the entire street.
This month the owners agreed to get bids from contractors for their inspections. Realizing that if they started earlier in the year with this process it would be beneficial for all of them. So, they started shopping around to get the best pricing. Figuring that a quote for all 16 4-plexes may be more cost-effective. So far bids have ranged from $300- $1,600 per 4-plex. And that’s just for the inspection and report cost. Not for any repair work. Which undoubtedly, some of the buildings will need. This set of buildings constructed in the mid-60s is apt to have issues.
Many investment property owners are unaware of this new Senate Bill 72l. And we expect contractors who perform inspections will get busier as the year comes to an end. And more expensive due to the high demand and looming deadline of January 1st, 2024. So don’t delay in setting up your inspection. We tuned into the Apartment Owners Association livestream. It was presented by Gregory Carlos of Dr. Balcony. Here are a few great tips.
- Get your inspection set up as soon as possible.
- You only need to get the inspection by the end of the year. If you fail the inspection. You have time into the following year to complete the repairs and pass the inspection.
- Properties will need to be re-inspected every 6 years.
- Your inspection report will need to be kept on file for 2 cycles. Meaning 12 years. PLUS it must be shared with the buyer when you sell your building.
The AOA’s presentation is on YouTube. They did have some technical difficulties at the beginning of the livestream. The Balcony’s presentation starts at 15:42 in the video. So fast forward.
https://www.youtube.com/live/p7BkkSdj5mQ?si=VG3e1Bb_Beb4aJbc
RECENT FAQ’s FROM CLIENTS LIKE YOU
I’m not a hands-on property manager. Do you have someone that can do that for me?
Some of our recent buyer clients stepping into the 2-4 unit arena for the first time are apprehensive. Everything is new to them. Including the property management side. So for the question above, yes! We got you. Well, not us personally. But we do have some seasoned property managers here in San Diego. Who can take care of that aspect of your ownership. Let us know if you need a quick introduction.
On that same note, did you know the Apartment Owners Association has a majority of the resources? Things you’ll need if you’d like to take a more hands-on approach? Including tenant screening, rental forms, and if needed property management advice from experts.
KEEP YOUR QUESTIONS COMING! We love hearing from you. And we plan on answering your questions monthly moving forward. It’s important that you’re informed and educated about what you buy and why you’re buying it.
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. Plus it provides you with 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.
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
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.
