In My Neighborhood in 90275>Question Details

T. Duvernet, Both Buyer and Seller in 90732

Considering buying an (empty) investment property in a rent controlled area.

Asked by T. Duvernet, 90732 Wed Aug 22, 2012

Can someone tell me the implications of this potential purchase? Do I have to conform to local comps, does the property need to be subdivided to accomodate sec. 8's....etc?

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Dear T. Duvernet,

Buying rental property is a rent controlled area depends on the rules for the area. L.A. for instance I believe exempts single family homes and propertyt built since 1978. If it is vacant when you buy you can charge what the market will bear. After that you are limited by their rules. If you charge market rent and raise rents as much and as often as you can you may not be at any disadvantage versus non- rent controll.

Some cities (Santa Monica?) force landlords to comply with their limits EVEN IF THE UNIT IS VACANT WHEN YOU BUY! In other words you inherit the previous owner's last rent as a starting point as if there had been no vacancy. There are usually exceptions for evicting a tenant because you or a family member want to move in but you probably would need to pay your tenant and their cost to move.

If you have more questions contact me at 310 265 1816 or jim@BlackHorseRealty.biz. I have owned and managed rental properties in the South Bay since 1976.
0 votes Thank Flag Link Thu Aug 23, 2012
Dear T. Duvernet,

Buying rental property is a rent controlled area depends on the rules for the area. L.A. for instance I believe exempts single family homes and propertyt built since 1978. If it is vacant when you buy you can charge what the market will bear. After that you are limited by their rules. If you charge market rent and raise rents as much and as often as you can you may not be at any disadvantage versus non- rent controll.

Some cities (Santa Monica?) force landlords to comply with their limits EVEN IF THE UNIT IS VACANT WHEN YOU BUY! In other words you inherit the previous owner's last rent as a starting point as if there had been no vacancy. There are usually exceptions for evicting a tenant because you or a family member want to move in but you probably would need to pay your tenant and their cost to move.

If you have more questions contact me at 310 265 1816 or jim@BlackHorseRealty.biz. I have owned and managed rental properties in the South Bay since 1976.
0 votes Thank Flag Link Thu Aug 23, 2012
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