Blog Post

How to Capitalize on a 2-4 Unit Opportunity in Long Beach

Dustin Edwards • Oct 23, 2020

Find the Right Opportunity and Grow Your Rental Portfolio

Multi-Unit Property
Managing properties throughout Long Beach, Lakewood and select nearby cities we manage our fair share of 2-4 unit properties. These properties are generally very popular as they have a nearly “home like” quality. They often provide attractive benefits to tenants such as on-site laundry or even a courtyard. For our property owners there is the added benefit of multiple rent checks from a single property!

One question we often get asked by our single family homeowners is, how do I find a great opportunity for a 2-4 unit? For the best values we have found it requires a bit of insight and usually a bit of work. Find out more on how you can find a 2-4 unit property that could be added to your portfolio.

Identify Opportunity Where Rents are Under Market
In any given market there are multi-family properties where the owner hasn’t taken the opportunity to steadily increase rents as allowed by laws and market conditions. For some owners they don’t want to lose great tenants and for others they don’t take the time to analyze market rents to see if more can be earned from their asset. Regardless of the reason, a key opportunity in looking for your next 2-4 unit property is identifying the buildings where the rent is far below the market rate.

When a property has rents below market rate it will make the asset appear as if it is being overpriced. The property may even look like a bad deal. Key commercial real estate metrics of Cap Rate and Gross Rent Multiplier are both based off of the revenue collected from rents. With rents low and the price possibly at nearly a market rate this can mean the property won’t initially look attractive. Take the time to analyze the market rents and even adjust the purchase price in your model, and leverage online rental calculators to help you see how you could create a true win-win if you can acquire the property.

The Units aren’t Updated
To have a strong upside in rents and the property value the units should be modernized. As you are evaluating properties with the largest opportunity look for structures that have been well taken care of (i.e. roofing, foundation, exterior walls, landscaping, etc.) and the units haven’t been updated in more than 20+ years. You might see terms used in the listings such as “original charm” or “authentic interiors” and that is your queue to dig a bit deeper to identify the condition of each unit.

Upgrading the units can be quite a job and one needs to be careful to follow every applicable rental regulation which can mean paying tenants a fee to vacate the property if you want to upgrade all of the units at the same time. Other options include allowing for natural attrition of units and upgrading the unit prior to the next tenant which can be easier on cash flow. Whichever direction you decide a key component for success will be updating the units.

Add an Accessory Dwelling Unit (ADU)
While ADU’s (Accessory Dwelling Units) have largely been associated with residential properties the same opportunity is available to residential income properties. This means you could effectively make a triplex into a 4-unit property (or even larger)! Adding an additional unit to an existing property is a powerful way to add additional income as well as additional total value to the property.  

Multifamily properties do have a number of key aspects for compliance and we would encourage you to research California Legislation AB 68 & AB 881 in greater detail as it will help you to see the opportunity for an ADU as part of a multifamily property.

When it comes to capitalizing on a 2-4 unit opportunity in Long Beach there are many items to consider. To help you understand how you could increase your rental portfolio we invite you to call us today at (562) 888-0247. Or if you prefer a complete evaluation of your property we invite you to fill out our Free Rental Analysis.



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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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