Do You Really Need a Property Manager in Sacramento?

Published: Aug 01, 2020

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With one of the hottest rental markets in the country, Sacramento is growing more competitive by the day. Today, we’re speaking with Scott Raymond—founder of Raymond Property Management, which is now part of Mynd—about what makes Sacramento’s rental market so competitive and why having a property manager is key now more than ever.Alex: Hey boys and girls. Alex here with Mynd Property Management. Today we are talking about investing in real estate in Sacramento and how not to lose your butt, so to speak. My guest today is Scott Raymond. Scott, how are you?Scott: I'm doing great. Thanks, Alex.Alex: Scott has over a decade of experience investing in Sacramento. He's a founder of Raymond Property Management, which is now part of Mynd. Scott—the question we're going to tackle today is, do you really need a property manager in Sacramento?Scott: Yeah, I think that's always been the case, Alex, but now more than ever for a variety of reasons. Probably first and foremost, within the last couple of weeks—we're in early September right now—the city of Sacramento just adopted rent control. What this does is, it imposes rental caps—how much you can increase rents on your properties—and then also imposes very specific rules and restrictions on how you move tenants out. So, not understanding these restrictions and regulations could prove very costly for an investor.Secondly, Sacramento remains one of the hottest rental markets in the country. So, having a management partner that really understands market rents and how to get there is pretty important. You know, next, getting units filled quickly is another key to success of any rental property. So, having a management partner that's really an expert in marketing to and locating tenants is going to be vital.Then you've got the costs of supplies, materials, and labor that have all increased as a result of tariffs and other factors—just a good economy. These can be very important aspects of keeping expenses low on properties. So, having a property manager that has economies to scale, that has a labor pool that they can rely on and groups of vendors that they get pricing breaks from can be very critical. And then not to mention, just the real inherent value of having a property manager. What I call the sleep-at-night factor. The property manager insulates you from all kinds of liability, tenant complaints, and hassles, to make sure your code compliant with fair housing, keeps your phone from ringing in the middle of the night with leaky water heaters and these sorts of things. So, I think now more than ever property management is key.Alex: Man, those are solid reasons. I've attended one of your seminars when you spoke about the viability of investing in Sacramento area. Can you drop just a couple of knowledge nuggets into why Sacramento is still red hot for investors?Scott: Yeah, Sacramento is red hot because, for the last literally eight years, Sacramento has topped the national real estate market in terms of year over year rent growth. This was a function of a couple of things. Sacramento has always been the little brother of the Bay Area. The Bay Area always got the jobs, always got the population migration and so forth. And Sacramento, even though it's only an hour's drive—maybe an hour and a half of traffic—and even though it is the state capitol, has universities and its close proximity to Tahoe and other great lifestyle type things, it was always kind of a second tier market to the Bay Area.Well now that what's happening is, with the Bay Area’s cost of housing getting so astronomical, people are looking to other areas. They're looking to Oregon. They're looking to Washington. They're looking to Arizona and Nevada, and then they realize Sacramento is just an hour drive away. I could still be close to my family and my friends that I went to college with or whatever. And so, Sacramento has benefited and will continue to benefit from those trends. And the fact that Sacramento developers, in Sacramento, have not built a lot of new properties or new units, you've got a pretty stagnant set of available properties for a lot of people that want them. I think that bodes pretty well for Sacramento.Alex: Wow. Very, very, cool round up. Well, Scott and I will be doing a few more episodes on investing in Sacramento. Check them out at Scott, thanks a lot and hopefully we helped you out today.Scott: Thanks, Alex.Between new regulations and increased competition, property managers are a must when thinking of entering Sacramento’s rental market. With resources and knowledge to successfully market and manage your rentals, a good property manager can insulate you from those factors that would otherwise keep you up at night, all while saving you time and money. Whether navigating new regulations, securing price breaks from vendors, or simply keeping your phone from ringing in the middle of the night, having a property manager is critical to successfully navigating Sacramento’s increasingly competitive rental market now and in the years to come.

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