Talk Irvine

General => Real Estate => Renters => Topic started by: Compressed-Village on June 03, 2017, 10:29:15 PM

Title: Rental Leasing Increase
Post by: Compressed-Village on June 03, 2017, 10:29:15 PM
My rentals for the past several years, each year when tenants renew a lease term I've always increase the rent rate by 3 to 4 percents. This year with the strong job market and tight inventory I am contemplating raising the rate about 10 percents. What would you do if you are a leasing your rental(s)? There are a lot of great applicants out there with good paying jobs that wanted to rents in Irvine.
Title: Re: Rental Leasing Increase
Post by: best_potsticker_in_town on June 04, 2017, 12:15:31 AM
Depends what type of property you have and what it's rented for now. If it's a 1 or 2 bedroom condo, there's plenty of inventory throughout Irvine. If it's a newer, 3+ bd SFR or detached, and in the mid-$3k range...there's less competition and more demand. Is current rent at or below market rate? Also, in case you didn't know, California law requires 60 day written notice for an increase over 10%. 10% or less is 30 days.

All that said, general words I like to live by: Don't get greedy.
Title: Re: Rental Leasing Increase
Post by: paperboyNC on June 04, 2017, 07:16:17 PM
In general I recommend limiting increases to 5% and waiting for turnover to ask for a higher increase.
Title: Re: Rental Leasing Increase
Post by: daedalus on June 04, 2017, 07:50:07 PM
I've only rented in a few places in my life.  One place evicted me due to the owner selling the place, but I likely would have left had the rent gone up.  The other 2 places got a 30 day notice from me as soon as they gave me a notice of a rent increase.  I actually liked the owners of the last place I rented, but the rent going up was a strong impetus for us to put an offer in on our first home. 

If the rent is still fair after the increase, it may not matter.  If you end up above market, then be prepared to have a little vacancy time.
Title: Re: Rental Leasing Increase
Post by: nosuchreality on June 04, 2017, 08:26:50 PM
Depends on what message you want to send to the tenant.

It also depends on how you've written your contract.

Keep in mind, the more you act like a big complex LL, the more likely the tenant will behave like a renter.  Right down to making you replace burned out light bulbs if you haven't spelled it out in the contract.
Title: Re: Rental Leasing Increase
Post by: Compressed-Village on June 05, 2017, 09:44:54 AM
All are well said!!! A good renter(s) is worth the weight of gold. Good renters will be hassle free.
Title: Re: Rental Leasing Increase
Post by: Kangen.Irvine on June 05, 2017, 07:56:48 PM
Be prepared to estimate costs of refurbishing between tenants. Those costs alone and missed rent during a vacancy may make you reconsider anything too drastic as well.
Title: Re: Rental Leasing Increase
Post by: zubs on June 06, 2017, 03:05:41 PM
You guys ever use Zillow to look at rental numbers?
Title: Re: Rental Leasing Increase
Post by: Compressed-Village on June 06, 2017, 03:09:25 PM
You guys ever use Zillow to look at rental numbers?

All the time. What # are you referring to?
Title: Re: Rental Leasing Increase
Post by: RandomG on June 06, 2017, 05:01:41 PM
And that's exactly why I signed a two year lease. Rents around me have already gone up 4-5% since December, or even more for upgraded rentals.
Title: Re: Rental Leasing Increase
Post by: zubs on June 07, 2017, 01:03:12 PM
Are the zillow rent prices very good?  My renter is leaving at the end of the month, and it seems like from Zillow, I can increase my rents about 20%.  I wonder how accurate it is.
Title: Re: Rental Leasing Increase
Post by: Compressed-Village on June 07, 2017, 03:43:59 PM
Are the zillow rent prices very good?  My renter is leaving at the end of the month, and it seems like from Zillow, I can increase my rents about 20%.  I wonder how accurate it is.

That mean that you were very generous with the previous tenant. I would take the current comps from your immediate area and shave off a hundred or two to attract applicants. Once you have a handful you choose the best from the pool and renters knows the current rate and thank you for the discount.

Do take into consideration of your listing. If your house decked out and super nice, you will get renter very quickly. If it needed repair now is the time to spruce it up.
Title: Re: Rental Leasing Increase
Post by: best_potsticker_in_town on June 07, 2017, 04:12:28 PM
Or you can nicely ask one of the many agents on here to see if there are some recent comps in the area...
Title: Re: Rental Leasing Increase
Post by: zubs on June 07, 2017, 04:48:51 PM
My current renter was caught up in the Lee Baca hide the prisoner from the FBI scandal...I think he spent time in federal prison.  He had to take a huge pay cut because he can't work as an LEO anymore.  Since the rental is mostly paid off.  I decided to keep his rents low.  Anyway he's leaving and I'm gonna raise my rental rates.

Title: Re: Rental Leasing Increase
Post by: Compressed-Village on June 07, 2017, 07:28:43 PM
Celebrity!!! That alone will get you a higher rate😀😀😀😀😀
Title: Re: Rental Leasing Increase
Post by: shahshah on June 09, 2017, 06:15:14 PM
we are looking at 4bd rental somewhere in the 3500-3700 range in the next month or two. we may stay in our current rental or move depending on what we see. there is not a whole lot to choose from and i'm comfortable paying this price BUT a 10% increase puts our current rent 350-370 per month. not sure i would go for that. this is why we are looking to buy. if i can find a 4bd with 2,100+ sq with at least 5,000 sq lot for 800 - 900 range i would probably jump on that instead of paying the rents.
Title: Re: Rental Leasing Increase
Post by: Compressed-Village on June 09, 2017, 07:54:39 PM
we are looking at 4bd rental somewhere in the 3500-3700 range in the next month or two. we may stay in our current rental or move depending on what we see. there is not a whole lot to choose from and i'm comfortable paying this price BUT a 10% increase puts our current rent 350-370 per month. not sure i would go for that. this is why we are looking to buy. if i can find a 4bd with 2,100+ sq with at least 5,000 sq lot for 800 - 900 range i would probably jump on that instead of paying the rents.

Like I mentioned in my earlier post, a great renter is worth the weight of gold. A good renter will determine wether an increase if any at all. It worth while to not increase anything if you have a responsible person at your property.
Title: Re: Rental Leasing Increase
Post by: SoclosetoIrvine on June 10, 2017, 01:22:57 AM
we are looking at 4bd rental somewhere in the 3500-3700 range in the next month or two. we may stay in our current rental or move depending on what we see. there is not a whole lot to choose from and i'm comfortable paying this price BUT a 10% increase puts our current rent 350-370 per month. not sure i would go for that. this is why we are looking to buy. if i can find a 4bd with 2,100+ sq with at least 5,000 sq lot for 800 - 900 range i would probably jump on that instead of paying the rents.

If you don't need Irvine schools and okay with Baker Ranch, might have something available soon  8) #shameless but yeah i've seen rent increases from friends who are both renters and landlords in south oc.  It's crazy
Title: Re: Rental Leasing Increase
Post by: USCTrojanCPA on June 11, 2017, 02:10:35 AM
we are looking at 4bd rental somewhere in the 3500-3700 range in the next month or two. we may stay in our current rental or move depending on what we see. there is not a whole lot to choose from and i'm comfortable paying this price BUT a 10% increase puts our current rent 350-370 per month. not sure i would go for that. this is why we are looking to buy. if i can find a 4bd with 2,100+ sq with at least 5,000 sq lot for 800 - 900 range i would probably jump on that instead of paying the rents.

Like I mentioned in my earlier post, a great renter is worth the weight of gold. A good renter will determine wether an increase if any at all. It worth while to not increase anything if you have a responsible person at your property.

Bingo, the easier my tenant makes it on me the easier I make it on them (i.e. no rental increases) and wait until they vacate to bump the rent closer to market.
Title: Re: Rental Leasing Increase
Post by: USCTrojanCPA on June 11, 2017, 02:12:20 AM
Are the zillow rent prices very good?  My renter is leaving at the end of the month, and it seems like from Zillow, I can increase my rents about 20%.  I wonder how accurate it is.

They are a hit or miss...best comps are from MLS both from what closed and what the competition is asking for.  If you give me your email address and the address of your rental, I'll send your MLS closed comps as well as the active listings.
Title: Re: Rental Leasing Increase
Post by: curious george on June 12, 2017, 09:49:04 AM
How can I find the market rate for the area we live at? by looking at the various websites, I see what was the asking price/rate, but that does not mean that this was the agreed upon rate, isn't that right?
Title: Re: Rental Leasing Increase
Post by: daedalus on June 12, 2017, 02:44:57 PM
If the owner's aren't getting what they're asking, then they're asking too much, and the property has sat long enough for them to have figured it out before they'll agree to something less.  If the market is hot, then rentals priced "at market" will get rented out quickly.  I would never think to haggle on rent in a hot market if I'm needing to get into a place quickly, and the price is fair for what's out there.
Title: Re: Rental Leasing Increase
Post by: momopi on June 12, 2017, 03:29:24 PM
I've been a landlord for almost 2 decades now.  I only raise the rent when the tenant moves out.  The cost of getting a new tenant is usually a lot more than a small increase in rent.

When you have a tenant who is hassle free and pay their rent on time, it's not worth the risk of losing them just to up the rent by $100.  I can afford not getting that $100, but the prospect of having the unit sit empty for ~3 months plus cost of cleaning/painting/repairs would make me choke.

If you own multiple rental homes, having 2 or more tenants move out around the same time is like losing a high stake Ferengi game of Tongo.

(https://pbs.twimg.com/media/CItiPJgVAAAhfBU.jpg)
Title: Re: Rental Leasing Increase
Post by: zubs on June 12, 2017, 07:16:13 PM
The problem here is my rental went from $2100 back in 2010 to.....What zillow is saying..$2800 now.
It's not $100 difference,  it's $700.  So in 7 years it's gone up $100/year.

Check your current rental house regarding how much you can rent it for at current market prices.  If your renter has been in that house for more than 5 years, you are probably losing $500/month if you haven't raised rents.
Title: Re: Rental Leasing Increase
Post by: USCTrojanCPA on June 13, 2017, 12:26:07 AM
The problem here is my rental went from $2100 back in 2010 to.....What zillow is saying..$2800 now.
It's not $100 difference,  it's $700.  So in 7 years it's gone up $100/year.

Check your current rental house regarding how much you can rent it for at current market prices.  If your renter has been in that house for more than 5 years, you are probably losing $500/month if you haven't raised rents.

Typically rents have risen by the same amount as inflation or about 3% per year.  Rents have increased about 8-10% from 2015 to now due to an improving job market and economy.  That being said, renters are extremely price sensitive and even a $50-$100/month difference will result in potentially additional time to get the home rented.
Title: Re: Rental Leasing Increase
Post by: irvinehomeowner on June 13, 2017, 09:04:03 AM
Getting tenants in Irvine is pretty easy with tons of students looking for homes... you just have to deal with the headaches (and the neighbors complaining to you).

I remember rents went up $500 in 2 years back in the 2000s when we were renting out our Irvine home. We increased the rent $500 after the previous tenants moved out and I remember my father saying that was crazy. We got 5 applicants and ended up discounting the monthly by $100 because they signed a 2-year lease.

If I didn't dislike landlording so much, I would get back into the Irvine rental market... even at low cash flow as long as the rent covers costs. Although Panda's one house at a time equation might work better in Johns Creek... unlike all the companies in Cali, I can't move out of state.
Title: Re: Rental Leasing Increase
Post by: zubs on June 13, 2017, 10:47:29 AM
As a private landlord it is difficult to raise people's rents every year, especially when it jumps like it has in the past few years.  So you're looking at a mortgage that is the same with all the regular costs, and the ability to raise rents.  It's quite the power trip.

My renter told me he knows the rents for the area is very high, and he didn't want me to subsidize his living situation anymore.  He is going to leave so I can increase my rent.
Title: Re: Rental Leasing Increase
Post by: eyephone on June 13, 2017, 10:58:57 AM
Problem solved. Hopefully he didn't come across the story on TI before he told you that he will bounce. Jk


As a private landlord it is difficult to raise people's rents every year, especially when it jumps like it has in the past few years.  So you're looking at a mortgage that is the same with all the regular costs, and the ability to raise rents.  It's quite the power trip.

My renter told me he knows the rents for the area is very high, and he didn't want me to subsidize his living situation anymore.  He is going to leave so I can increase my rent.
Title: Re: Rental Leasing Increase
Post by: Compressed-Village on June 13, 2017, 03:14:43 PM
That's pretty surprising for his actions. I remembered when I was a renter, myself, I rented a house and for the first three months the owner would comes to the front door on the 1st of the month to collect the rent. It was around 300 hundred below market comp and I was so happy.

Then on a fourth month into my 1 year lease, a note comes from sheriff notify us we have to vacate as the property is foreclosed. At the time I was living with my brothers and I carried few possessions, nonetheless it was a hectic and so much hassle experience, that I would not want anyone to endure. Then I realized the owner at the time when we signed the lease, she known full well that she never pay her mortgage debt and intended to just pocket our rent check. So even when renting you better do your due diligence.
Title: Re: Rental Leasing Increase
Post by: USCTrojanCPA on June 13, 2017, 03:28:51 PM
As a private landlord it is difficult to raise people's rents every year, especially when it jumps like it has in the past few years.  So you're looking at a mortgage that is the same with all the regular costs, and the ability to raise rents.  It's quite the power trip.

My renter told me he knows the rents for the area is very high, and he didn't want me to subsidize his living situation anymore.  He is going to leave so I can increase my rent.

Sounds like you have a great tenant...hold on to them. 
Title: Re: Rental Leasing Increase
Post by: eyephone on June 13, 2017, 03:33:55 PM
As a private landlord it is difficult to raise people's rents every year, especially when it jumps like it has in the past few years.  So you're looking at a mortgage that is the same with all the regular costs, and the ability to raise rents.  It's quite the power trip.

My renter told me he knows the rents for the area is very high, and he didn't want me to subsidize his living situation anymore.  He is going to leave so I can increase my rent.

Sounds like you have a great tenant...hold on to them.

Keep them for around $8k a year loss of potential rental income. ($700 the difference of rent x 12 months = $8,400)
Title: Re: Rental Leasing Increase
Post by: Tom Lane on June 16, 2017, 02:48:48 AM
My rentals for the past several years, each year when tenants renew a lease term I've always increase the rent rate by 3 to 4 percents. This year with the strong job market and tight inventory I am contemplating raising the rate about 10 percents. What would you do if you are a leasing your rental(s)? There are a lot of great applicants out there with good paying jobs that wanted to rents in Irvine.

Hi, just found this forum and I'm still trying to move over there but rents are high. Here in Vegas the culture is different (the people). Landlords generally don't raise rents except maybe by 2 percent, unless the landlord is from California and then they raise rents with computer programs by 5 percent of more.
Title: Re: Rental Leasing Increase
Post by: Compressed-Village on June 16, 2017, 06:05:44 PM
Rental in Irvine is different than other local rental to OC by an arm and a leg. Now compare that to Vegas is a huge difference. Rental in Irvine typically rent out very quickly. As far as increases, that determine case by case basis for me. If you have a great renter, I would not raise any.
Title: Re: Rental Leasing Increase
Post by: zubs on June 19, 2017, 03:17:03 PM
As a private landlord it is difficult to raise people's rents every year, especially when it jumps like it has in the past few years.  So you're looking at a mortgage that is the same with all the regular costs, and the ability to raise rents.  It's quite the power trip.

My renter told me he knows the rents for the area is very high, and he didn't want me to subsidize his living situation anymore.  He is going to leave so I can increase my rent.

Sounds like you have a great tenant...hold on to them. 

If you were to monetize "great tenant" how much would it be? 

$100/month
$200/month
$300/month

Where's the line drawn?
For me I'd say around $250 to $350 per month.
Title: Re: Rental Leasing Increase
Post by: illinoisjoe on June 19, 2017, 03:42:22 PM

If you were to monetize "great tenant" how much would it be? 

$100/month
$200/month
$300/month

Where's the line drawn?
For me I'd say around $250 to $350 per month.

I like this question. Let's get down to brass tacks. Being a landlord in California doesn't seem like something I can even fantasize about given my line of work, but I can tweak the question a bit: "If you were to monetize "adequate landlord" how much would it be?

When I really thought about it, I think my number was about the same as yours: All things being equal, I'd probably pay about $250/mo to escape a bad landlord.
Title: Re: Rental Leasing Increase
Post by: spootieho on August 24, 2017, 12:02:02 AM
If you were to monetize "great tenant" how much would it be? 

$100/month
$200/month
$300/month

Where's the line drawn?
For me I'd say around $250 to $350 per month.
I'm not a landlord, so I'm a bit ignorant. 

I'd guess it would be about a month's rent divided by 12 months plus a little more for hassle and expenses on turn around.  That pretty much matches your numbers.  Then again, out here it's common to see people move in a couple days after someone moves out.
Title: Re: Rental Leasing Increase
Post by: zubs on August 24, 2017, 09:41:29 AM
an update...for my case above. I finally rented my house out for $2700.  So hopefully the new renters are good.
So my rent went from $2200 to $2700 in one move out at the end of JUN.

$500 more a month.  The hell is going on with this economy?  I feel like a bandit taking that much in rent.
But there were 6 offers.... fuck burning man.

While my new renters were moving in, another couple came to look at the house and were shoo'd away by the new renters.
Title: Re: Rental Leasing Increase
Post by: nosuchreality on August 24, 2017, 12:13:25 PM
an update...for my case above. I finally rented my house out for $2700.  So hopefully the new renters are good.
So my rent went from $2200 to $2700 in one move out at the end of JUN.

$500 more a month.  The hell is going on with this economy?  I feel like a bandit taking that much in rent.
But there were 6 offers.... fuck burning man.

While my new renters were moving in, another couple came to look at the house and were shoo'd away by the new renters.

Are you renting a 2/2?

Seriously, 3 bedroom apartments are $3000 (okay, $2955), an actual townhouse or detached 3bd, a little more.

Rental demand in Irvine and immediate vicinity is very strong, such that if you own a place, financially it may be better to move, landlord and rent than sell and buy.  Essentially using the new renters to supplement your rent while paying for your old place.
Title: Re: Rental Leasing Increase
Post by: zubs on August 24, 2017, 02:03:34 PM
This is a single story house that is 3/2 but not in Irvine.  It's been a rental since 2010.
Title: Re: Rental Leasing Increase
Post by: spootieho on August 24, 2017, 02:48:02 PM
an update...for my case above. I finally rented my house out for $2700.  So hopefully the new renters are good.
So my rent went from $2200 to $2700 in one move out at the end of JUN.

$500 more a month.  The hell is going on with this economy?  I feel like a bandit taking that much in rent.
But there were 6 offers.... fuck burning man.

While my new renters were moving in, another couple came to look at the house and were shoo'd away by the new renters.

Are you renting a 2/2?

Seriously, 3 bedroom apartments are $3000 (okay, $2955), an actual townhouse or detached 3bd, a little more.

Rental demand in Irvine and immediate vicinity is very strong, such that if you own a place, financially it may be better to move, landlord and rent than sell and buy.  Essentially using the new renters to supplement your rent while paying for your old place.
Makes sense.

It probably makes more financial sense, though, to sell the $700,000 house and buy 2 $350,000 houses elsewhere and rent them for $2000 per month each. 
Title: Re: Rental Leasing Increase
Post by: Compressed-Village on August 24, 2017, 03:08:47 PM
an update...for my case above. I finally rented my house out for $2700.  So hopefully the new renters are good.
So my rent went from $2200 to $2700 in one move out at the end of JUN.

$500 more a month.  The hell is going on with this economy?  I feel like a bandit taking that much in rent.
But there were 6 offers.... fuck burning man.

While my new renters were moving in, another couple came to look at the house and were shoo'd away by the new renters.


Are you renting a 2/2?

Seriously, 3 bedroom apartments are $3000 (okay, $2955), an actual townhouse or detached 3bd, a little more.

Rental demand in Irvine and immediate vicinity is very strong, such that if you own a place, financially it may be better to move, landlord and rent than sell and buy.  Essentially using the new renters to supplement your rent while paying for your old place.
Makes sense.

It probably makes more financial sense, though, to sell the $700,000 house and buy 2 $350,000 houses elsewhere and rent them for $2000 per month each.
Title: Re: Rental Leasing Increase
Post by: Compressed-Village on August 24, 2017, 03:10:44 PM
an update...for my case above. I finally rented my house out for $2700.  So hopefully the new renters are good.
So my rent went from $2200 to $2700 in one move out at the end of JUN.

$500 more a month.  The hell is going on with this economy?  I feel like a bandit taking that much in rent.
But there were 6 offers.... fuck burning man.

While my new renters were moving in, another couple came to look at the house and were shoo'd away by the new renters.


Are you renting a 2/2?

Seriously, 3 bedroom apartments are $3000 (okay, $2955), an actual townhouse or detached 3bd, a little more.

Rental demand in Irvine and immediate vicinity is very strong, such that if you own a place, financially it may be better to move, landlord and rent than sell and buy.  Essentially using the new renters to supplement your rent while paying for your old place.
Makes sense.

It probably makes more financial sense, though, to sell the $700,000 house and buy 2 $350,000 houses elsewhere and rent them for $2000 per month each.

Where do you buy 350.000 and able to rent out for 2K a month? Its easy to punch in some numbers and throw it on the board.

Show me where you have in mind that you can buy on the cheap and collect high rent.

Title: Re: Rental Leasing Increase
Post by: eyephone on August 24, 2017, 03:12:52 PM
an update...for my case above. I finally rented my house out for $2700.  So hopefully the new renters are good.
So my rent went from $2200 to $2700 in one move out at the end of JUN.

$500 more a month.  The hell is going on with this economy?  I feel like a bandit taking that much in rent.
But there were 6 offers.... fuck burning man.

While my new renters were moving in, another couple came to look at the house and were shoo'd away by the new renters.


Are you renting a 2/2?

Seriously, 3 bedroom apartments are $3000 (okay, $2955), an actual townhouse or detached 3bd, a little more.

Rental demand in Irvine and immediate vicinity is very strong, such that if you own a place, financially it may be better to move, landlord and rent than sell and buy.  Essentially using the new renters to supplement your rent while paying for your old place.
Makes sense.

It probably makes more financial sense, though, to sell the $700,000 house and buy 2 $350,000 houses elsewhere and rent them for $2000 per month each.

Where do you buy 350.000 and able to rent out for 2K a month? Its easy to punch in some numbers and throw it on the board.

Show me where you have in mind that you can buy on the cheap and collect high rent.


The train already left the station to buy cheap CA property. I guess you can look out of state.
Title: Re: Rental Leasing Increase
Post by: Compressed-Village on August 24, 2017, 03:18:22 PM
an update...for my case above. I finally rented my house out for $2700.  So hopefully the new renters are good.
So my rent went from $2200 to $2700 in one move out at the end of JUN.

$500 more a month.  The hell is going on with this economy?  I feel like a bandit taking that much in rent.
But there were 6 offers.... fuck burning man.

While my new renters were moving in, another couple came to look at the house and were shoo'd away by the new renters.


Are you renting a 2/2?

Seriously, 3 bedroom apartments are $3000 (okay, $2955), an actual townhouse or detached 3bd, a little more.

Rental demand in Irvine and immediate vicinity is very strong, such that if you own a place, financially it may be better to move, landlord and rent than sell and buy.  Essentially using the new renters to supplement your rent while paying for your old place.
Makes sense.

It probably makes more financial sense, though, to sell the $700,000 house and buy 2 $350,000 houses elsewhere and rent them for $2000 per month each.

Where do you buy 350.000 and able to rent out for 2K a month? Its easy to punch in some numbers and throw it on the board.

Show me where you have in mind that you can buy on the cheap and collect high rent.


The train already left the station to buy cheap CA property. I guess you can look out of state.

Been there done that. Got burned in Arizone Tucson, GA, and even in Durhan NC close to Duke. Rent rate even now for 3/2 bed/bath is around low 1K. I will stick with local rental market.
Title: Re: Rental Leasing Increase
Post by: nosuchreality on August 24, 2017, 03:31:32 PM
This is a single story house that is 3/2 but not in Irvine.  It's been a rental since 2010.

Okay, makes sense, old RE101, location, location, location which having been floored by house prices in what was the rougher parts of OC.  I think the primary driver is gentrification and transition to sharing economy.  Neglected unit are bought, upgraded, churned via aggressive rent increase and re marketed for a capitall gain based off of the new proforma rent.   Other higher end units, particularly beach or attraction local units are more profitable via airBNB than as a long term rental.

The net result is a loss of higher quality rentals and substantial pressure on the low end driving all rents up.

IMO when you have a job family or job and good school combo, where you live is relatively inflexible resulting in fairly inelastic demand
Title: Re: Rental Leasing Increase
Post by: eyephone on August 24, 2017, 04:00:10 PM
an update...for my case above. I finally rented my house out for $2700.  So hopefully the new renters are good.
So my rent went from $2200 to $2700 in one move out at the end of JUN.

$500 more a month.  The hell is going on with this economy?  I feel like a bandit taking that much in rent.
But there were 6 offers.... fuck burning man.

While my new renters were moving in, another couple came to look at the house and were shoo'd away by the new renters.


Are you renting a 2/2?

Seriously, 3 bedroom apartments are $3000 (okay, $2955), an actual townhouse or detached 3bd, a little more.

Rental demand in Irvine and immediate vicinity is very strong, such that if you own a place, financially it may be better to move, landlord and rent than sell and buy.  Essentially using the new renters to supplement your rent while paying for your old place.
Makes sense.

It probably makes more financial sense, though, to sell the $700,000 house and buy 2 $350,000 houses elsewhere and rent them for $2000 per month each.

Where do you buy 350.000 and able to rent out for 2K a month? Its easy to punch in some numbers and throw it on the board.

Show me where you have in mind that you can buy on the cheap and collect high rent.


The train already left the station to buy cheap CA property. I guess you can look out of state.

Been there done that. Got burned in Arizone Tucson, GA, and even in Durhan NC close to Duke. Rent rate even now for 3/2 bed/bath is around low 1K. I will stick with local rental market.

I wouldn't recommend to buy in Vegas, or Arizona.
You mentioned GA. (Did you invest in the JCreek?) lol
Title: Re: Rental Leasing Increase
Post by: spootieho on August 24, 2017, 04:40:55 PM
Where do you buy 350.000 and able to rent out for 2K a month? Its easy to punch in some numbers and throw it on the board.

Show me where you have in mind that you can buy on the cheap and collect high rent.
A family member in Alaska is renting their $350k place for $2000/mo.  I'm not saying to invest there, but that's where I got the number from.

Here's area I've been looking.
https://www.zillow.com/homes/1046-Kelly-Creek-Cir,-oveido-fl_rb/
House is probably worth about $250k  I saw bigger 4 bedrooms selling for $270k in that area.
Asking rent is $1750/mo

A $350k place renting for $2000/mo isn't a far stretch.

I am told, though, the best ROI is with cheaper houses in bad neighborhoods.

Been there done that. Got burned in Arizone Tucson, GA, and even in Durhan NC close to Duke. Rent rate even now for 3/2 bed/bath is around low 1K. I will stick with local rental market.
I wouldn't have ever recommended Tucson.  Phoenix/Tempe/Scottsdale area maybe, in the past, but not Tucson, AZ. 
Title: Re: Rental Leasing Increase
Post by: Liar Loan on August 24, 2017, 05:30:56 PM
You can buy a condo for $345k that rents for $2k/month in Huntington Beach.  I own a condo in this complex, so I'm very familiar with it.

https://www.redfin.com/CA/Huntington-Beach/16627-Viewpoint-Ln-92647/unit-8D/home/5322694

Rental Zestimate is $1,950 but a recent comparable on Craigslist was asking $2k.

https://www.zillow.com/homes/for_rent/16627-Viewpoint-Ln-.num.-8d,-Huntington-Beach,-CA-92647_rb/
Title: Re: Rental Leasing Increase
Post by: nosuchreality on August 24, 2017, 07:31:57 PM
Where do you buy 350.000 and able to rent out for 2K a month? Its easy to punch in some numbers and throw it on the board.

Show me where you have in mind that you can buy on the cheap and collect high rent.
A family member in Alaska is renting their $350k place for $2000/mo.  I'm not saying to invest there, but that's where I got the number from.

Here's area I've been looking.
https://www.zillow.com/homes/1046-Kelly-Creek-Cir,-oveido-fl_rb/
House is probably worth about $250k  I saw bigger 4 bedrooms selling for $270k in that area.
Asking rent is $1750/mo

A $350k place renting for $2000/mo isn't a far stretch.

I am told, though, the best ROI is with cheaper houses in bad neighborhoods.

Been there done that. Got burned in Arizone Tucson, GA, and even in Durhan NC close to Duke. Rent rate even now for 3/2 bed/bath is around low 1K. I will stick with local rental market.
I wouldn't have ever recommended Tucson.  Phoenix/Tempe/Scottsdale area maybe, in the past, but not Tucson, AZ. 

According to civic dashboards, Irvine has a 9% rental vacancy rate and a 46% home ownership rate.
Ovieda has a 34.9% rental vacancy rate and a 78% ownership rate.
Title: Re: Rental Leasing Increase
Post by: eyephone on August 24, 2017, 07:33:37 PM
As in Honda car online forums?
Title: Re: Rental Leasing Increase
Post by: nosuchreality on August 24, 2017, 07:39:30 PM
As in Honda car online forums?

You trust Honda don't you?

http://www.civicdashboards.com/city/oviedo-fl-16000US1253575/rental_vacancy_rate

Frankly, the Irvine number is kind of putzed, so the 35% number is putzed, but it should at least be proportional.  We're really spoiled landlording around here, anywhere within about 2 hours of here.  Elsehwere, vacancy is real.  It's winter, and it's coming.
Title: Re: Rental Leasing Increase
Post by: spootieho on August 24, 2017, 11:37:00 PM
According to civic dashboards, Irvine has a 9% rental vacancy rate and a 46% home ownership rate.
Ovieda has a 34.9% rental vacancy rate and a 78% ownership rate.
Yeah, your place will get rented out pretty quickly in Irvine.  To be on topic, that makes it easier to raise rates as you don't have to fear longer vacancy periods.

I don't know much about Oviedo.  It's on my list of places to check out.  The area is growing, is near Orlando and UCF. 

I was just giving real world numbers per the request.  I thought my numbers were rather conservative as I hear there's much better ROI in cheaper areas.
Title: Re: Rental Leasing Increase
Post by: nosuchreality on August 25, 2017, 06:57:49 AM
Better yes, good, I'm not too sure.  I've been scouring other locations and cash flow is still ugly.  My primary concern with a place like Ovidea would be what I've heard from landlord acquaintances that end up with properties like those that sit empty for months. 

AFAICT, the problem with cap rate is play for equity has infected everywhere I've looked.  Their cap rate might be better, but still same issue.  IMO, most properties being sold for rentals are not being sold based on cash flow, they are being sold on cap gain expectation.

I checked rentometer and the Kelly Cir house has 15 rents within about 2 miles that average $1550 for rent.  $1750 will put it above the 80%-tile.
Title: Re: Rental Leasing Increase
Post by: nosuchreality on August 25, 2017, 07:41:15 AM
You can buy a condo for $345k that rents for $2k/month in Huntington Beach.  I own a condo in this complex, so I'm very familiar with it.

https://www.redfin.com/CA/Huntington-Beach/16627-Viewpoint-Ln-92647/unit-8D/home/5322694

Rental Zestimate is $1,950 but a recent comparable on Craigslist was asking $2k.

https://www.zillow.com/homes/for_rent/16627-Viewpoint-Ln-.num.-8d,-Huntington-Beach,-CA-92647_rb/

These are around.  Would you buy it at today's price, rates and rents?

At all cash, the return is low but it has potential, IMO.  If rents are going to increase another 20% over the next three years, even more so.

At 30% down and financed at 4.25%, PITA with insurance basically blanks the $1950 without vacancy and other repair or expense is coming out of your  pocket (or the security deposit if you pin it back to them)
Title: Re: Rental Leasing Increase
Post by: momopi on August 25, 2017, 09:15:46 AM
I like this question. Let's get down to brass tacks. Being a landlord in California doesn't seem like something I can even fantasize about given my line of work, but I can tweak the question a bit: "If you were to monetize "adequate landlord" how much would it be?

When I really thought about it, I think my number was about the same as yours: All things being equal, I'd probably pay about $250/mo to escape a bad landlord.

You don't need to fantasize.  You only need to save money, wait for RE down cycle and invest in the "left coast" of California (along I-15).

When you go to a casino they have different minimums for table games.  South OC is like the higher stake table in the back vs Riverside County is the lower stake table in the front.
Title: Re: Rental Leasing Increase
Post by: paydawg on August 25, 2017, 09:18:39 AM
Generally, what are the worst months to have a lease end? 

I'm assuming it's Sept-Dec because families are generally situated by the Summer, in anticipation of the upcoming school year. 
Title: Re: Rental Leasing Increase
Post by: Liar Loan on August 25, 2017, 01:49:29 PM
You can buy a condo for $345k that rents for $2k/month in Huntington Beach.  I own a condo in this complex, so I'm very familiar with it.

https://www.redfin.com/CA/Huntington-Beach/16627-Viewpoint-Ln-92647/unit-8D/home/5322694

Rental Zestimate is $1,950 but a recent comparable on Craigslist was asking $2k.

https://www.zillow.com/homes/for_rent/16627-Viewpoint-Ln-.num.-8d,-Huntington-Beach,-CA-92647_rb/

These are around.  Would you buy it at today's price, rates and rents?

At all cash, the return is low but it has potential, IMO.  If rents are going to increase another 20% over the next three years, even more so.

At 30% down and financed at 4.25%, PITA with insurance basically blanks the $1950 without vacancy and other repair or expense is coming out of your  pocket (or the security deposit if you pin it back to them)

The returns are too low for me to be interested in buying it.  For investment properties, I like the cash-on-cash return to be 5% higher than I could expect to make from stocks (so for instance, if I expect to make 8% on stocks, I want a 13% CoC return to make up for the hassles of landlording), or it needs to be an appreciation play that is compelling.  This condo doesn't meet either criteria.  I think it would be ok for an owner occupant already paying rent though.

The time to buy this was in 2011.  One of my friends bought in this complex in 2011 at my urging for $157k.  He then put $15k into renovating it, for a total of $172k all in.  I believe the purchase was for all cash, so today that would be yielding a 10% cash return on top of almost $175k in appreciation.

I think those of you living in Irvine should think about investing in stuff like this after the next downturn.  Entry level properties got hit so much harder due to the weaker financials of those buying them.  So whereas, OC as a whole dropped about 40% and Irvine dropped around 20%, this complex dropped 60% from peak to trough.  The highest comp in 2006 was $400k and the low was my friends purchase for $157k in 2011.  You can make so much more money riding that appreciation wave during a recovery in areas that crash hard (The IE is similar, especially San Bernardino county.)

Buy your primary in Irvine to limit downside risk, but buy your investments in areas that crash hard for maximum gain on the rebound.

P.S.  The areas most susceptible to crashing hard next time will be anywhere that FHA loans are clustered.  These are the new subprime.