Answering Your Questions About California Rent Control

Today I want to provide some clarity about California’s Assembly Bill 1482, a rent control law that has some investors worried.

My last video regarding California’s Assembly Bill 1482 generated a lot of interest and questions, so today I’ll review the bill and provide some clarity on rent control and what it means for you.

First, single-family homes and condos are not subject to rent control unless they are owned by a corporation or a real estate investment trust (REIT). In the city of Los Angeles specifically, however, condos, duplexes, and triplexes are subject to the rent control bill.

Secondly, many wanted to know how owner occupied properties would be affected by the bill. Under the Californian rent control law, if you have a duplex where you live in one unit and the other unit is rented to a tenant, the second unit is not subject to rent control.

Single-family homes and condos are not subject to rent control unless they are owned by a corporation or a real estate investment trust (REIT).

The rent control bill has convinced some that maybe they should look elsewhere to invest in rental properties. Based on a survey between 2001 and 2018, the average rent increase in California was only 2.5%. Some people have not raised their rents in two or three years.

So what is the effect of the rent cap? I think that will motivate many investors to increase their rents before the end of the year to the maximum amount allowable by AB-1482.

Finally, the California Public Employee Retirement System (CalPERS) just averaged out with less than 6.5% on their return. For them to really cover all the benefits for retirees, they need to get a 7.5% annual return. If you can get 8.5%, you are ahead of CalPERS in that regard; this is a positive point for you to keep in mind.

If you have any questions or feedback about California rent control laws, don’t hesitate to reach out to me. I’d love to hear from you.

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