With the New Year upon us now is the time that many are evaluating their lifestyles. For many that means a new diet or exercise program and for others that means focusing on one’s finances. For those that have rental property in Long Beach, Lakewood, or nearby cities there is no time like the present to evaluate what is possible with your rental portfolio. That means whether you have a single rental property or you have a number of rentals it is important to take account of how you are making the most from your investments.
To help maximize your investments in your rental portfolio we invite you to consider the following areas for evaluation:
How Does Your Current Rental Amount Compare to the Market Rates?
One of the biggest ways you can impact the yield on your investment is through the monthly rental amount. Take time to compare your rental to other rentals that are available in the marketplace. As you compare your rental we invite you to be critical of the condition of your property, amenities/features offered of other properties in comparison to yours, and consider how long your tenant has been in place.
Even if your evaluation determines that your property might be worth a substantial increase in rent you might choose to raise by a more modest amount to keep your existing tenant in place.
Note: Make sure to consult your property management company and/or a real estate attorney to understand if it is possible to raise the rent given local restrictions. Economic crisis conditions such as COVID-19 and/or ordinances such as rent control can limit or even prevent you from raising the rental rate.
Condition of Your Rental Property
If your rental property is in Long Beach it could have been built anywhere from the early 1900’s to the 1940’s, 1960’s or even much newer. Regardless of when it was built, when is the last time that you updated it? While there are items that certainly have lifespans (i.e. heating units, plumbing, etc.) there are also aspects of your home that can go out of style (i.e. think of cabinets, paint styles, etc.). Attracting and retaining great tenants means taking the time to update your property with current trends. This doesn’t mean you have to be cutting edge, but if you have a busted tile countertop and old appliances it may be time to make some updates.
Expand an Existing Property with an ADU/ADUs
An Accessory Dwelling Unit (ADU) has long been associated with adding an additional living structure to a residential property, but an ADU (or even plural ADUs) can be added to a residential income property as well. With building costs generally in the $250-$300 per sq ft range and home values in the $500+ per sq ft range you have an opportunity to add value to your property as well as increase your monthly rental income. Evaluate your rental portfolio to see if
developing an ADU
is an aspect that is right for your goals.
Purchase a New Income Property
Mortgage rates are at historic lows and rents have remained strong in Southern California. If you haven’t purchased a new rental property in a number of years now may be your best opportunity to grow your portfolio. While purchasing a rental property in Long Beach can require more than 20% down to make it cash flow positive if you also add an ADU/ADUs to the property you could be in the best possible position to have positive cash flow in your first year of ownership.
When it comes to achieving your goals with your rental portfolio in Long Beach there are many items to consider. We invite you to call us today at (562) 888-0247 to find out more. Or if you prefer a complete evaluation of your property we invite you to fill out our Free Rental Analysis.
