The Most Common Problem for Rentals in Long Beach

While Long Beach CA may be a great city to invest in for landlords and real estate investors, because of its dynamic rental market, it's important not to jump in without being prepared. It's not uncommon for new landlords to attempt to get a much higher return on investment than what the market dictates. These issues can lead to poor tenants, frequent turnovers and long vacancy periods that can significantly affect your bottom line. It's important for investors to understand the most common problem for rentals in Long Beach, CA is under estimating the workload. 

Today we've broken down how being ill prepared can result in significant losses to investors and landlords. 

Tenant Screening

Tenant screening is one of the most crucial steps in protecting your rental property investment. A comprehensive screening process helps to predict whether a tenant may have late payments, cause property damage or potentially end a lease early. Landlords should ensure that tenants are screened for their credit, monthly income, and rental history. Income and credit help to ensure the prospective tenant is able to afford monthly payments while providing insight into their financial responsibility. Rental history can show you their habits on how they’ve treated rentals in the past.

Although vacancies are one of the biggest concerns for many landlords, rushing this process can create a much larger financial issue later down the road. Ensure clear communication with applicants since careful screening may improve long term occupancy which protects consistent cash flow.

Property Maintenance and Upkeep

Maintenance not only directly affects the property’s value, it also impacts tenant retention, regulatory compliance and curb appeal. Proactive maintenance can help to reduce long term expenses and help in avoiding emergency repairs. Routine inspections of the roof, plumbing, HVAC equipment, and electrical system are helpful in maintaining costs consistent month to month. Deferred maintenance oftentimes leads to a significantly higher cost, this is because a small leak or loose wire when left alone can result in wires short circuiting or pipes bursting. A preventative maintenance plan provides the landlord with the ability to schedule improvements rather than reactive repairs.

Timely repair response also shows your tenants that you’re invested in their comfort which supports tenant satisfaction. This can result in more consistent rental income since a happy tenant is more likely to renew their lease rather than move out.

Rental Market Evaluation

Ensuring accurate rental pricing is fundamental to maximizing performance while reducing vacancy and turnover. If you set the rent too high, you’re more likely to experience higher vacancy periods, whereas underpricing can leave a significant amount of income on the table. It's important to conduct market analysis regularly in order to improve accuracy. Consider comparing similarly sized rentals in the area, the condition of the rental as well as the amenities provided to the tenant. This can give you more accurate data for pricing your rental which can maximize your monthly income. This is also true for rent increases, although some landlords may want to earn as much as possible, there are many regulations that limit the amount you can increase the rent. In California, rent increases are limited to 5% plus local consumer price inflation with a 10% maximum though every city and county may have differing rules and regulations.

Rental investments perform best when guided by an efficient system, and measured decision making. A structured process helps to limit uncertainty and create steady operational conditions in the ever changing real estate market. If you need additional help with understanding the rental market or if you need help managing your Beach City rental property, we invite you to call us today at (562) 888-0247 or complete our Owner Application online.