You just bought a great apartment building in Los Angeles and like every investor you want to realize the upside by increasing the value of your property but the question is how?
To increase the value of your property you can choose some common solutions like: sub-metering utilities, adding washers/dryers or vending machines, create prime parking spots, or invest in renovations.
After choosing one or all of those solutions you may naturally want to increase the rents in your building but the question is how do you do that when it’s also a rent-controlled building?
In this article, we will discuss some solutions that will help you to raise the rents while still following the letter of the law.
Why You Have to Realize the Upside
As a Real Estate investor, you know that the value of an apartment building is also directly related to the income it generates but how can you raise the rents during these challenging times when most people oppose rent increases?
The City of Los Angeles is one of the toughest places to raise the rent in California because the city has rent control measures in place that do not allow you to raise the rent more than 4% annually so since this option may be off the table, the big question is what do you do next?
Cash for Keys
One of the most common solutions that some landlords turn to when they can’t raise the rent on their tenants, or evict them, is a cash for keys exchange.
In a cash for keys exchange, landlords have the ability to pay their tenants an agreed upon amount for them to vacate their current rental property.
Sadly, in Los Angeles cash for keys transactions are heavily regulated.
Tenants here have many rights under the Rent Stabilization Ordinance (2017) so if you plan on offering cash for keys to your tenants there are a few things that you need to know.
- Your tenants don’t have to accept your cash for keys offer.
- You must fill out a two-page Disclosure Notice and submit it to your tenants before providing them with a cash for keys buyout offer.
- The buyout agreement must be in the primary language of the tenant and they also must know that they can cancel the agreement any time within 30 days after the buyout agreement has been signed by all parties.
If done properly, a cash for keys offer can help a tenant to move on to another rental property while also helping the owner to rent their property at the current market rent.
Get Help with Realizing the Upside of Your Property
There’s no doubt that it can be difficult realizing the upside of your rental property in 2019 especially with more laws seemingly moving in favor of tenants.
The good news is that you can realize the upside of your rental when you hire MW Real Estate Group. We are your best resource for sourcing, acquiring, and managing rental properties in Los Angeles.
Our company will provide you with all of the solutions that you need to realize the upside of your rental property while protecting your best interests at the same time.
Learn more about the services we can offer you contact us today at (213) 927-2117 or click here to connect with us online.