Our team of local professionals at Mynd Property Management are different than other East Bay property managers. Servicing the greater Oakland, Richmond, Hayward, Tracy, and Berkeley areas, we leverage real-time data to consistently better our services, providing owners with seamless management experience.
Customers working with Mynd can rely on us as their trusted partner, providing them with a healthy investment, and their residents with a happy home. Manufacturing and business were once the East Bay’s greatest investments, now, it’s residential real estate. It’s time to make your real estate investment work for you.
If we place a resident and they fail to pay rent at any time during their lease, we reimburse you up to $5,000 in lost rent while we resolve the situation.
If a resident we place moves out and leaves behind property damage in excess of their security deposit, we will cover the difference, up to $5,000.
If a Mynd-placed resident fails to pay rent and an eviction is required, Mynd will cover the court costs and legal fees up to $5,000.
Your rental property is one of your most valuable assets. You expect concrete, tangible results, and Mynd delivers. We focus on measurable results that you can see.
Quicker than average leasing times.
Less than 4 business hours for owners, less than 8 business hours for residents.
Higher than average resident quality score (720+)
No need to worry about rental payments, less than 2% delinquency.
Consistently high customer satisfaction scores (Better than 4/5)
Net Promoter Score of 58 versus industry average of 7
We start by hiring the best people with deep local expertise.We equip them with the tools, technology and data. You get results.
Shea is your local Bay Area Portfolio Manager
The East Bay has plenty of large corporations to provide residents , but that doesn’t mean Mynd’s property managers are off the hook. We’ll still be doing regular maintenance to make sure your homes are in tip-top shape. Trees near your roof? Trimmed! Central air? We’ll suggest a replacement at the fifteen year mark! Local ordinances? Followed to a ‘T’ so you never face a fine!We’ll also respond to the needs of your residents in real time, so that if anything goes wrong we’ll be there immediately. We’ll also make sure your residents are reliable before they ever move in so that you never have to worry about a missed month’s rent
1611 Telegraph Ave #1200
Oakland, California 94612
Extra care has to be taken for neighborhoods that are near the East Bay Area shore because the salt in the air can cause exterior damage to your Bay are rental property, particularly to concrete. We’ll keep an eye on your driveway, foundation, and everything else in between. Explore our resources below to learn more about East Bay, CA property management and more!
Thinking about purchasing a rental property in Tacoma, WA? Learn how looking at the rental statistics, the demographics, and having a local property manager as a partner can ensure you are looking at real numbers when deciding if the area fits your investment strategy.
Before investing in an area, you will want to look at the demographics, home prices vs rental prices, forecasted economic growth, and other important statistics to see if it fits with your investment strategy to help you reach your goals. Will the area give you the cash flow or appreciation you are looking for?
Tacoma, WA, one of “America’s Most Livable Cities”, is a port city on the Puget Sound and is known for being one of the most walkable cities in the US. From its beautiful waterfront to its numerous city parks that include the country’s second largest city park (700 acres), the area has seen a 12% population growth since 2010.
Tacoma offers more affordable investment opportunities than the Seattle area which can be expensive. Cash flow opportunities are better in Tacoma because the prices of homes are not as high.
Median home price: $354,019
Home prices have gone up 9% in the past year.
Commuters – Many choose to work in Seattle but live in Tacoma because it is more affordable.
Students - Several universities are in the area including the University of Washington’s Tacoma campus, so there are a lot of student renters.
Military - McChord Air Force Base is South of Tacoma, so there are military families renting in the area as well.
Between the port, universities, military presence, and proximity to Seattle, Tacoma is a great area for investors looking for an area whose economy is being fueled by a diverse mix of industries.
Tacoma is the 7th busiest container-handling port and attracts businesses in multiple industries. It is known for its high-tech industry that includes Intel and Expedia which are headquartered there. Agricultural and forest products are also large contributors to the local economy.
Tacoma has seen steady job growth over the last 10 years and expects 39.9% in future growth. With its strong industry presence and growth record, it is a great place to invest in rental property for less than a home in a Seattle would cost.
If you are considering investing in Tacoma, contact us at Mynd. We can help you determine if this market fits your strategy to reach your goals. If it doesn’t, we have offices in 19 markets and can help you find an area that does.
The rental market is cyclical, so you want to make sure you set rent to match today’s prices. Just because you rented your property for a certain amount 3 years ago doesn’t mean it will rent for that amount today. The price could be higher or lower depending on what the market says is the going rate. To avoid extended vacancy time, you will want to accurately price the property, so you are getting the maximum return while also filling the vacancy quickly.
Steve Rozenberg, Head of Investor Education for Mynd, says he sees this as a good, steady mix of renter/owner occupied homes which makes it a great market to have a rental property. You should always be able to find a renter.
Knowing the trends and statistics for the area is key to your success as an investor. Consider hiring a local Tacoma property manager like Mynd who can help you determine the correct rent rate. Mynd has access to proprietary information so you are getting current, accurate numbers to base your decision on. If you want to know what you can expect to rent your home for, Mynd offers a FREE rental analysis.
They take care of the day to day operations required when you own a rental property such as:
Do you have the time to manage the property? How valuable is your time to you? If you are managing it yourself, do you know that you are doing it correctly and following the laws?
Landlords must comply with Federal, state, and local laws that apply to rental properties. These laws are constantly changing, and as a landlord you are expected to keep up with them. If you must evict a tenant, there may be new laws in place that limit how you can do that. If managing property isn’t your full-time job, you are more likely not up to speed on current laws such as:
There are a lot of laws that have to do with tenant’s rights, and you must be sure you comply. If you aren’t up on the laws, you may find yourself getting in trouble which can cost you $1000s in fines and court costs.
Our Tacoma property managers can help you make smart decisions and ensure your property is following the laws. Mynd has in-house counsel to help ensure your property is complying with the laws. Contact us today at Mynd about property management in Tacoma or finding your next investment property in one of the19 markets we serve.
As an investor, you want to know that investing in a rental property in Everett, WA aligns with your strategy and helps you achieve your goals. Identifying the right data and numbers to calculate your return is an important step in making an informed, smart decision. Having a local partner like a property manager makes this process easier.
Are you looking for monthly cash flow? Is the property you are looking at going to give you what you need to at least cover your expenses? Are you only interested in appreciation or debt paydown? Your strategy must be defined before you start looking for a property.
Everette is a coastal city on the shores of Port Gardner Bay and is located 25 miles north of Seattle. It attracts families with its world class schools, over 30 city parks, and numerous outdoor sports, activities, and art experiences.
The median income for the area is about average for the US, but the home prices are significantly higher than average. You might be able to make enough cash flow to cover your expenses, but you are more likely looking at making your money in appreciation.
Boeing’s 747, 767, 777, and 787 Dreamliner airplanes are constructed in the world’s largest building located in Everett, and they offer a popular tour of the facility. Everett’s proximity to Seattle is an advantage because it is going to be fed by the strong industry nearby.
When you buy a property in one of the more popular areas, you are probably going to see more appreciation. With an average age of 33, residents are likely families interested in the quality schools in the area. They are also more likely looking homes with multiple bedrooms for their growing families.
Talk to an Everett, WA property manager about the local market and what trends they are seeing. They can answer questions like:
These are the questions you want answered before purchasing a property, so you have the proper expectations. Contact us at Mynd for more information on the Everett area. They can tell you what types of properties are renting quickly, what renters are looking for, and more.
If Everett doesn’t fit your strategy, we can help you find a market that does. Mynd has offices in over 19 markets. Our local property managers can use Mynd’s proprietary data to help find you properties that match your strategy, whether you want to invest locally or diversify across several markets.
It is important to know what the market is dictating when setting rent for your Everett rental property. The goal is to get the right amount of rent while leasing it quickly, so pricing it right is critical.
You might not be able to get the same amount of rent if you lease your property in the Winter (off season) vs the Spring/Summer months (peak season).
If the industries in the area are in a downturn or upturn, that can influence the rent you can expect to receive.
The rent amount will vary depending on the property type, square footage and number of bedrooms. When comparing rents, look at properties that are the same as yours. Being that many of the homes are older, you may find you can get a little more money in rent by doing some updates to the property.
When you own a rental property there are a lot of day to day operations to take care or not to mention all the ever-changing laws you must follow. Should you continue to do this yourself or does it make sense to hire an Everett property management company?
If you own multiple rental properties or plan to in the future, the tasks required increasingly take up more of your time. Keeping up with all the laws you must comply with can become a heavy burden. Maybe you got into investing because you wanted a safe, secure retirement investment or passive income, but you did not realize the amount of time that was involved in managing it yourself. You thought you were gaining free time and ended up having a second job.
It is entirely possible that you will not end up where you hoped because you may not be doing something right. Not complying with a law could result in your ending up in court owing $1,000s in fines.
Getting that great deal when you buy the property is only the first step in the process that leads to your success. Steve Rozenberg, Head of Investor Education for Mynd, thinks it is important to have a team to help you maximize your return.
They take care of the day to day operations required when you own a rental property such as:
You must follow Federal, state, and local Property Code that dictate how a property must be maintained. When it comes to fixing things in the property, who is responsible for them? The tenant or the landlord? There are things you can’t ask on an application or during the screening process.
Landlords must comply with Federal, state, and local laws that apply to rental properties. These laws are constantly changing, and as a landlord you are expected to keep up with them. If you have to evict a tenant, there may be new laws in place that limit if or how you can do that.
Mold can be a problem in the Everett area due to the amount of rain it gets. You will need to make sure the roof, ventilation, and plumbing is in good shape to prevent mold. There are laws that protect the tenant to ensure they have a safe home to live in. Property managers know what you have to do to comply with any laws in regards to Property Codes.
If you don’t have the time or desire to keep up with the laws and regulations, it might be a smart decision to hire a knowledgeable property manager. Mynd has local property managers that know the laws to ensure you are following them as well as in house legal counsel.
A good property manager helps you make smart decisions and ensures your property is following the laws. Contact us today at Mynd about property management in Everett or for help in finding your next investment property in one of the 19 markets we serve.
On August 31, 2020, California Governor Gavin Newsom (D) signed AB 3088 into law, providing state-wide protections for tenants and landlords in the face of the ongoing coronavirus pandemic. The safeguards extended to tenants worrying about evictions and to landlords concerned about foreclosures.
AB 3088 limits a landlord’s ability to evict a tenant for non-payment of rent. To make use of this protection, the tenant must submit a declaration signed under oath of financial hardship due to the financial burden experienced between March 4 – August 31. A valid declaration will prevent evictions from occurring before February 1, 2021.
For hardship stemming from the coronavirus pandemic between September 1, 2020 – January 31, 2021, tenants are expected to pay 25% of expected rent to avoid eviction by January 31, 2021.
The expectation of rent has not been eliminated. Instead, unpaid rent cannot be the reason for eviction for tenants that have experienced financial hardship and submitted a valid declaration. Tenants will still be responsible for paying back rent to landlords, who can begin to recover their debts through a civil small claims lawsuit on March 1, 2021.
The jurisdiction of small claims courts will be temporarily expanded to allow landlords to recover unpaid rents.
Unpaid rent isn't waived under AB 3088. Instead, it's converted into consumer debt collected in small claims court as early as March 1, 2021. If a tenant cannot meet the 25% rent minimum, AB 3088 would only provide eviction protection until February 1, 2021. If a landlord attempts to use extrajudicial self-help, such as shutting off utilities, threats, or coercion, to generate an eviction, then the landlord may face penalties as high as $1,000 to $2,500.
The following legal and financial protections will be extended to tenants:
AB 3088's protections are extended to most tenants if they sign a declaration that they've been financially impacted due to the pandemic. What constitutes "COVID-19-related financial distress" includes:
When a landlord delivers an eviction notice for failure to pay rent, a financial distress form must be provided. The tenant has 15 days to sign and return the financial distress form. The economic distress form does not cover months to come, so that the process may be repeated on a month to month basis. The declaration is signed under "penalty of perjury,” so if a tenant provides knowingly false information, they can be charged with perjury.
Lawful eviction that has nothing to do with unpaid rent caused by the coronavirus pandemic can move forward as early as September 2, 2020. That means landlords will be able to pursue:
Evictions for unpaid rent will resume on October 5, 2020, for tenants that do not submit a financial distress declaration.
Evictions for reasons other than nonpayment of rent cannot be performed as retaliation against nonpayment of rent due to the coronavirus pandemic.
Individual cities may have their own eviction moratoriums, and tenant and landlord protections that may be more robust than that provided by AB 3088. For this reason, it's critical to consult both the stipulations outlined by AB 3088 and the stipulations, if any, of one's local jurisdiction.
If a locality passed a new moratorium after August 19, 2020, then it cannot take effect until February 1, 2021. Ordinances that expire before February 1, 2021, cannot be extended until February 1, 2021. Finally, if a local jurisdiction establishes its repayment period, it must begin on or before March 1, 2021.
Given the complicated nature of the law, it's advised that tenants contact an attorney if a landlord provides notice of eviction. There are many free legal aid foundations to reach out to. The Legal Aid Foundation of Los Angeles, for example, offers free legal services to over 100,000 residents of the greater Los Angeles area.
AB 3088 does not protect landlords from foreclosures, nor does it require banks to provide forbearance. Instead, mortgage servicers must contact borrowers before pursuing foreclosure proceedings with forbearance options.
Dual tracking, when a provider initiates foreclosure proceedings while considering loan modifications with the borrower, is also forbidden.
If forbearance is not an option for a small landlord, then the mortgage servicer must provide a written explanation. These protections extend to January 1, 2023.
Due to AB 3088, California will keep a dramatic increase in residential evictions at bay through the early part of 2021. Although, further action by the federal government is required to ward off the true extent of the pandemic's effects.
If you have rental properties, your property manager should be able to support you in navigating the changing regulations around tenant protections. To learn more about Mynd Management's services, contact firstname.lastname@example.org
The East Bay region of Northern California is generally defined as the area to the east of the San Francisco Bay and San Pablo Bay. There are about 2.8 million people living in the two counties (Alameda and Contra Costa) that make up the East Bay region. In addition to being in close proximity to the US central tech hub Silicon Valley, the East Bay has one of the top 10 busiest ports in the US—the Oakland Seaport—which is said to discharge about 99 percent of all containerized cargo goods in Northern California.
East Bay houses many large US corporations, in industries such as healthcare (Kaiser Permanente, Sutter, John Muir), gasoline/oil (Chevron, headquarters in San Ramon, ranked #11 on the Fortune 500), consumer goods (Clorox, headquarters in Oakland, #477 on the Fortune 500), grocery/food (Safeway, headquarters in Pleasanton), entertainment/animation (Pixar, headquarters in Emeryville). For those who decide to live in the East Bay and commute into San Francisco, the rail system, BART, will get commuters to and from the city via the Transbay Tube.
The NorCal region is highly urbanized, with some suburban neighborhoods mixed in as well. The weather is usually about 10 degrees warmer than in San Francisco The East Bay Division of the League of California Cities includes 33 medium- to large-size cities, with Oakland, Fremont, Hayward, and Concord among the largest. In addition to many outdoor activities such as hiking, trails, parks, and more, East Bay is also home to two major league sports teams: NFL’s Oakland Raiders and MLB’s Oakland A’s.
Home sales prices in East Bay cities dropped YOY (2018–2019), down 9 percent in Oakland and 15% in San Ramon (Bay East Association of Realtors)
University of California Berkeley ranked #22 in National Universities by U.S. News and World Report
Home to the headquarters of Chevron, Pixar, Safeway, Clorox, and more
Median age of residents in the East Bay is 39.6
Alameda County residents have a median household income of $96,296, which is higher than the national average of $63,179
Job growth in Oakland alone is expected to increase by 35.3% over the next 10 years, compared to the national average of 33.5%
The Northwest region of the East Bay includes Richmond, Berkeley, and parts of Oakland. Berkeley is not only home to the top national institution, the University of California, Berkeley, it also has one of the best school districts in California (#24 for most diverse and #72 for best school districts). It has a population of over 110,000 residents, and median home value is $1.26 million, with median rent at about $3,800.
Oakland’s median home value is $752,275, with median rent prices listed at around $3,000, which is $300 less than the San Francisco-Oakland-Hayward Metro region. Popular Oakland neighborhoods for homebuyers include West Oakland, Dogtown, Jingletown, Temescal, and Jack London Square.
Concord and Walnut Creek are just steps away from Napa Valley wine country, with many golf courses and open spaces for outdoor adventures. Concord is a burgeoning arts and cultural city located very close to many award-winning wineries. It’s one of the most affordable cities in the East Bay, with average home value listed as less than $575,000.
Walnut Creek boasts many award-winning schools and a myriad of outdoor activities. It’s also an affordable place to settle down with family: Home values average at just under $800,000, with rental properties averaging $2,900.
Just across the bay, the southwest region is an area perfect for singles and families. Hayward is an affordable and centrally located city in the East Bay with great views of the Bay Area and beyond. Home values average at about $660,000, and median rent is about $500 below the metro area’s median of $3,300.
Centrally located in the East Bay, Pleasanton and San Ramon are great commuter locations for many locations in the Bay Area. Further south, Fremont and Milpitas are adjacent to Silicon Valley. Pleasanton is a more upscale suburban neighborhood in the East Bay, with home prices averaging over $1 million and median rents around $3,500. It’s about 25 miles east of Oakland has been ranked in various best places to live and raise a family lists (such as on USA Today).
San Ramon is a smaller city with a population of 76,000. Homes average about $1.2 million in this popular city for families, with several golf courses and outdoor adventures.
East Bay’s Fremont is close to Silicon Valley, with a median home value of $548,385. With nearly 200,000 residents, Fremont is a family-friendly city known for its many parks and it has easy access to Silicon Valley and nearby universities. Milpitas is also directly adjacent to Silicon Valley, with home values averaging just over $1 million and rental prices averaging $3,400.
For more information, refer to our Knowledge Center and visit our East Bay, CA Property Management page for local landlord tips and information. Our team has vast knowledge and experience in local East Bay property management and can help you to have a better investment experience. We educate on topics in the East Bay area ranging from landlord tips, repairs and maintenance, leasing, rent control and even new laws! We look forward to furthering your rental property education.
Location, location, location! This is probably the real estate industry’s most overused adage, and as much as we hate to repeat it time and again, we can’t ignore a longtime truth: where investors buy matters as much as — if not more than —what they buy.OK. So, location matters. You get that. But what exactly does that mean? How should real estate investors evaluate locations throughout the East Bay area?In Part I of a multi-installment series on real estate investing, we explore a number of factors that influence where to buy income property. Our advice is grounded in decades of experience buying and managing rental properties, both at the height of the market and when it was at record-lows.So, without further ado, we offer a few guiding principles:
The latter half of the 20th century favored the suburbs. A number of factors, most notably persistently high crime, meant that anyone who could afford to leave the city fled for the suburbs’ greener pastures. Over the last decade, the pendulum has shifted back and people are moving back to cities in droves. Why? Well, in addition to the jobs, cultural amenities, bars and restaurants that cities have to offer, they also tend to be highly walkable.Residents today place a premium on being able to run errands, grab lunch, or get to work with little or no need for an automobile. This is especially true now that Zipcar, Uber, Lyft and other ride-sharing services have created on-demand access to vehicles as needed. Millennials and Baby Boomers alike want to live in these “20-minute neighborhoods,” where a bulk of their daily activities can easily be reached within a 20-minute walk. While these areas tend to be located in the urban core, they’re also starting to pop up in inner-ring suburbs.To evaluate a neighborhood’s walkability, check its Walk Score. Most people assume that San Francisco is the Bay Area’s most walkable community – but as it turns out, Downtown Berkeley takes the top spot with a walk score of 96. All told, the East Bay offers a range of highly walkable neighborhoods. Oakland’s Lakeshore, Temescal and Upper Dimond neighborhoods all rank in the mid- to high-80s.
Related to walkability is proximity to public transit. Not everyone can live in a 20-minute neighborhood, but that doesn’t mean that they want to jump in their car and sit in traffic, either. Demographic shifts and concerns over quality of life have made living near public transit more desirable. Studies have shown that consumers are willing to pay more for housing located in areas located near public transit.The gold standard is buying property near one of the Bay Area’s BART stations. East Bay is home to several BART stations, and during rush hour trains come every 2 to 3 minutes. Depending on which neighborhood you’re coming from, this means you can get to downtown San Francisco in less than 20 minutes. Riders can catch up on social media, respond to emails, play games or read the news – sure beats a stressful bumper-to-bumper commute each day! Residents are willing to pay a premium for the convenience of living near public transit.What’s more, a recent analysis finds that residential properties located in proximity to fixed-guideway () transit maintained their value better than those without transit access between 2006 and 2011. The study concluded that San Francisco-area properties located within a transit shed outperformed the region by 37% during that time. This confirms our on-the-ground experience: buying rentals near public transit helps to preserve value despite the market’s ebbs and flows.
It can take years () for neighborhoods to transition. But for investors with a long term buy-and-hold strategy, owning in a transition neighborhood can pay big dividends in the long run.Look at who’s investing and where. In an upcycle like we’re in today, investment starts percolating into neighborhoods on the fringe. We’ve seen this happen right here in our own backyards. For years, investors would think long and hard before buying rental property in Oakland. It was considered one of the most dangerous cities in the U.S. Fast-forward a few years: real estate investors priced out of San Francisco started scooping up properties in Oakland at bargain prices. Rents in Oakland have subsequently experienced year-over-year double-digit gains. Today, Oakland is considered one of the nation’s hottest rental markets.Identifying East Bay’s next trendy neighborhood can be tricky. One strategy is to use the Starbucks test: where is Starbucks opening its newest locations? In their own words, Starbucks calls its real estate decisions “as much an art as a science.” Indeed, Starbucks and other upscale retailers do extensive research before making their location decisions.In a perfect world, you’d buy real estate in these areas just before Starbucks, Trader Joe’s, Whole Foods and the others start to put down roots. Gentrification moves through neighborhoods in wavelike patterns; buying right in front of the wave helps to maximize value. Investing in rental property near a new Starbucks is a good strategy nonetheless; research shows that homes located near a Starbucks appreciate faster than average. The East Bay area is peppered with opportunities like these.
All investment decisions are personal. As you evaluate where to buy rental property, consider how much risk you are willing to take. Your risk profile () will influence where to buy.For instance, if you have a high risk tolerance, you might consider investing in rougher transitional neighborhoods. With high risk comes the opportunity for high reward. But keep in mind: these are usually the first neighborhoods to lose value during an economic downturn. Let’s compare San Francisco and Antioch as illustration. San Francisco real estate values dropped by about 20% during the 2008-2010 recession, and quickly recovered. Meanwhile, property values in Antioch plummeted by about 70%, and have yet to fully recover. The longer your investment time horizon, the easier it will be to weather the market’s ebbs and flows.Conversely, if you have a low risk tolerance or shorter time horizon, it makes sense to buy income property in more established locations. More desirable core areas maintain their value well even in a down market, and recover quickly on the upswing. It comes as no surprise that these areas tend to be located near the jobs and amenities downtowns have to offer—including walkability, public transit, and of course….a Starbucks.
Whether you’re a first time investor or seasoned vet, finding a well-located property is essential for maximizing value. As you set out in search of your next East Bay rental property, keep these guiding principles in mind.Part II of this series will look at the types of real estate and property features you may want to consider if you’re contemplating investing in the East Bay area.Stay tuned for more!
Class A. Class B. Single family. Multifamily. Turnkey properties. Value-add opportunities. Primary market. Secondary market. Tertiary market? Gut rehabs. Mixed-use. Student housing. Housing for young professionals. Rent controlled. Non-rent controlled.When it comes to investing in East Bay real estate, there are so many different types of properties you can buy. So how do you narrow it down and decide what to buy?In Part I of a multi-installment series on real estate investing, we shared the guiding principles that help us determine where to buy rental property. In Part II of this series, we explore a few key considerations that help guide us when evaluating what types of rental property to buy.
How much renovation work are you willing to take on? This differs for every investor. Some investors have construction and rehab experience, or are willing to manage the multiple contractors that are needed when taking on a major renovation project. Buying an older, outdated or otherwise “rough” property can make a lot of sense for those with a lot of experience or access to capital. As successful flippers know, one can realize a lot of financial upside by purchasing an underutilized asset, renovating it and then holding onto it for a period of time.But renovating a property isn’t for everyone. If you have less experience, less capital, or are less interested in being a hands-on investor, buying a newer property makes a lot of sense. Newer properties – or properties that are older but have been newly-renovated () – require less frequent repair and maintenance. You might pay more for these properties on the front end, but new properties also tend to command higher rents. For these reasons, we believe buying a fully renovated asset is still a great investment; you just won’t get the additional juice from adding value through renovation.Fortunately, the East Bay is a mixed-bag when it comes to age and condition of properties. Many of the homes were built in the early 1900s. The craftsmanship on these properties is usually fantastic: the properties are structurally sound, and tend to feature unique details that you don’t find with new construction. Some of these properties have been scooped up by investors who renovated and flipped them, a welcome addition to the brand new units popping up throughout the East Bay.
This may sound counter-intuitive, but hear me out: in my experience, you don’t want to buy the nicest property in an up-and-coming neighborhood. Instead, my investment approach is to look for the worst building in a great, stable community. People are always willing to pay up to live in an awesome neighborhood (). It’s easier to improve a single property than to improve an entire neighborhood, so we prefer to invest in value-add opportunities in high-demand areas instead of vice versa.
There are certainly advantages to both types of real estate. Single family homes can be a great investment because when it’s time to sell, you have a broad range of buyers, from institutional investors looking to add to their portfolios to owner-occupants willing to spend more for their “dream home” than would be justified on a cap rate basis alone. The price point of a single family can also be an advantage, for investors with a limited amount of capital. Single family homes are usually easier to finance, and if it’s someone’s first purchase they might be able to qualify for as little as 3.5% down. Multifamily properties are usually more expensive, and lenders usually want buyers to put down at least 30% if the property won’t be owner-occupied. Investing in a single family is a great option for those who don’t have a huge chunk of money to put down at the outset.That said, I’m biased towards multifamily properties. Although they require a larger upfront investment, they tend to be less risky. If one tenant moves out or stops paying rent, you still have the cash flow coming in from the other units to balance expenses. The repair and maintenance costs tend to be more predictable, and when large capital expenditures do arise (), the costs are lower on a per unit basis.
Most buildings in America are not rent controlled. Investing in non-rent controlled buildings has generally proven to be great investment strategy. The ability to raise rents with the market allows for substantial increase in cash flow and appreciation during periods of increasing rents.That said, investing in rent controlled buildings is a strategy that we like a lot. The cash flow is more reliable due to lower vacancy rates, along with less sensitivity to declines in market rents. If a resident in a rent controlled unit is paying 30% below market rent, and market rents go down by 10%, they are unlikely to move out or ask for a lower rent. Furthermore, there is upside for the owner when residents move out and units reset to market rates, which is guaranteed to happen eventually ().What to look for specifically in rent controlled buildings is a big topic, which I’ll cover in a future article.
Buying rental property is an investment, so you want to be sure this investment is generating meaningful cash flow. There are a few instances where investors might be willing to forego cash flow in the short term, such as buying a rent-controlled property with dramatically sub-market rents, or buying a fixer-upper that will need substantial investment. Otherwise, investors should look to buy properties at a reasonably high cap rate. In other words, you want to be taking some money off the table each month. At a minimum, you should be covering the cost of your debt (). In the current tight market, we target East Bay properties that have at least a 5-7% cap rate. In a down market, I’d look for properties with a 7-10% cap rate ().So many investors focus on where to buy rental property that they often forget to put thought into what types of rental property to buy. We hope that Part I and Part II of this investors’ series has left you feeling well-equipped to make smart, informed decisions as you look to purchase your next East Bay rental property.