If you follow Rule #2, then it is critical you become knowledgeable on the current rental laws as well as on area development that may impact your property. For example, California recently changed the law regarding termination notification to a tenant in a month-to-month lease or rent. The new law requires the landlord to give a tenant 60 days’ notice of termination of a month-to-month lease, regardless of the 30-day notice agreed upon in the original lease. Fortunately for the tenant, they still can give the landlord 30 days’ notice. This major change became effective the beginning of this year. Sources to keep up to date with rental laws are apartment associations and the web site of the Department of Real Estate, or a similar governing board.
If you buy property in a rent control area, the Rent Control Board determines the percentage by which you can increase your rent each year, and it changes each year - so you need stay informed. In my area, we recently had a change that increased the amount of money you have to pay a tenant if you want them to leave your property. They call is a relocation fee; I call it blackmail.
I don’t care for rent control, and I don’t recommend it if you’re a first time investors. Rent control is intended to favor the tenants and is very restrictive to the landlord. However, in my view it has the opposite effect. Landlords have no motivation or simply cannot afford to improve their properties, because they are not allowed to evict tenants or to even increase their rent. Over time, the buildings and areas governed by rent control deteriorate. |
