Blog Post

How Often Should You Do A Rental Price Analysis?

Dustin Edwards • Mar 14, 2024

Knowing how much you should rent your rental property is incredibly important to maximizing your income as a landlord. You may have to deal with unwanted vacancies if the rent is too high. On the other hand, if your rent is too low, you’re leaving money on the table. Although in California, you’re limited to how much and how often you can raise the rent for your tenants, savvy investors will do a rental price analysis to be well informed.


Today, we’ll review how often you should do a rental price analysis and when to implement this knowledge.


Lease Renewal Period

Although in California, landlords are allowed to raise rent twice per 12-month period, the total increase can't exceed the yearly limit of either 10% or 5% plus the percentage change in cost of living based on whichever is lower. Some owners and investors may take advantage of this and continually increase their rental rates every 6 months. However, these investors tend to own larger apartment buildings that can afford high turnover rates and vacancies. Most times, landlords who own fewer rental properties will opt to increase rent once per year, typically around the time a lease agreement expires.


By waiting until a lease is up for renewal, you allow your tenant to decide to resign if they’re pleased with the rental property. Keep in mind that increasing rent doesn’t always equate to higher yield. For example, suppose you had an exceptional tenant living in the rental. In that case, it may be worth delaying an increase in rent to ensure the tenant renews their lease, as it's more cost-effective to preserve a good tenant than to fill a vacancy.


Major Property Upgrades

Doing major property upgrades is an excellent opportunity to raise a tenant's rent. It can prove to your tenants that you’re investing in the rental property and you value your tenant's comfort. Upgrading your rental’s core systems, such as electrical, plumbing, and HVAC, is an expensive investment that can improve your rental income. Although the California yearly cap still limits you, a tenant is more likely to accept the increase in rent without contesting.


Additionally, you can justify a higher rent increase when it's time to renew the lease. Some tenants may not be able to resign, though the base asking price would be increased for any future prospective tenant. 


Periodically

It's an accepted practice to do rental price analysis annually. This can help you to maximize the amount you can charge for new vacancies for lease renewals. It gives you time to adjust to market trends while avoiding substantial fluctuations in rent, as this can be disruptive to your tenants. However, once again, you’ll have to navigate the rental increase cap for existing tenants.


Follow the Market

Long Beach’s real estate market is constantly changing, and while it usually goes up, there are the occasional drops. It's a good idea to monitor the local market indicators. These include neighboring vacancy rates, aggregate rental prices, and major infrastructure developments. 


Significant changes in these factors can greatly affect rental prices and demand. This is especially true if your rental property is in an exceptionally sought-after market.


Managing your rental prices can feel intimidating or overwhelming, but this doesn't have to be the case. If you have questions about analyzing your rental prices or need a hand managing your properties, we invite you to call us today at (562) 888-0247 or fill out our
Owner Application online.

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By Dustin Edwards 01 May, 2024
Everyone wants to feel safe in their homes. As an investment property owner, it's up to you to decide whether or not to include security measures in your property. Many of the costs associated with the security measures can be included in the rent, meaning not only can you keep your property safe, but you can earn more income in the long run. However, you would still want your tenants to have renters insurance to protect their assets. Today, we’ll discuss the top five security measures you can add to your property and why they're beneficial to you and your tenant. Security Cameras Cameras are probably one of the first security measures people think about when asked about security. Cameras provide more benefits than just surveillance. They provide an extra level of security for the safety of the tenants and their belongings. Additionally, security cameras can be useful when repairs are required. Cameras can aid in supervising repairs and maintenance to ensure you’re receiving the agreed-upon work. During vacancies when the property is empty, security cameras can help keep the property safe from potential intruders. Doorbell cameras are incredibly popular now. They provide the aforementioned safety of a camera that can be accessed remotely, as well as the ability to communicate with visitors. Although one must be careful never to say you're not home, just say you're unavailable to strangers. Security Lights Security lights with motion detectors are another effective tool when adding security measures to your property. These lights brightly if a potential intruder attempts to get near your home. They can provide enough illumination to see the intruder or, at the very least, scare them off. Nowadays, you can find a combination of security cameras and motion-activated security lights, such as the floodlight cam wired plus from Ring . Additionally, because these lights only turn on when motion is detected, they’re more cost-effective than traditional lights with a switch. Illuminate the Property Light generally deters intruders as it's more difficult to hide. Adding lighting to the landscaping can increase the security of the property while creating a relaxing atmosphere. Lights can also be used in other areas of the property to accent features such as trees, benches, or artwork. This can help your property stand out while giving your tenants an additional feeling of safety. Keyless Entry Keyless entry is seen as both a convenience feature and a security feature. They usually use an electronic passcode, biometric data, or grant access through a smartphone app. Physical keys can be lost, stolen, or duplicated. You reduce the risk of unauthorized entry by eliminating the need for a physical key to enter the property. Many keyless entry systems include several features, such as remote locking and monitoring. Although keyless entry is a great new technology for keeping your tenants and properties safe, they’re best used with other security systems. Security Company Nothing beats having an extra pair of eyes on your property for security. This is where security companies like ADT and SimpliSafe come in. While companies may deal with security in varying ways, they aim to protect your investment. While safety is the primary role of a security company, remember that many tenants may be willing to pay more for a premium amenity like a home security company. Keeping your property and tenants safe is incredibly important to the longevity of an investment property. If you’re looking to improve the security of your Long Beach rental property or need help managing your beach city rental property, we invite you to call us today at (562) 888-0247 or fill out our Owner Application online .
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