With statewide rent control now in effect, some landlords are sticking around, while others are selling. For those sticking around, there might be some questions as to what to do next. Here are four tips to consider with your rental properties:
- Pass on your expenses. If you have multifamily, see about either submetering or splitting up the utility meters. This way you don’t have to pay for it (or even spend the time sorting through who pays what). This can be costly, but better and less management in the long run.
- Be picky with tenants. Before, you may have been more flexible on who you let in. This includes mediocre credit or pets. Going forward, because the eviction laws are getting stricter, be pickier from the get-go. With rental inventory decreasing and demand for housing increases, you will have more leverage as a landlord.
- Consider refinancing if the numbers make sense. Interest rates are low. If you can refinance and get your mortgage down, that can increase your cash flow.
- Think of creative ways to get additional sources of revenue. Can you have coin-operated laundry? How about an upcharge for maid service? There are ways to get creative in this area.
The advantage of investing in areas such as Los Angeles is that you are dealing with bigger numbers. You may be paying $60,000/year in a mortgage but imagine what happens when it is paid off. I have clients who will make a six-figure passive income by the time they are ready to retire and that is just off three units. Therefore, it may be worth playing the game.
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