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Properties that are exempt from rent control
In general, California rent increase law is aimed at multi-family apartment complexes and provides a number of exemptions, including the following:
SFRs (single family residences)
Condominiums
Owner-occupied duplexes
Mobile homes
School, college, and university dormitories
Hotels
Rental properties built within 15 years prior to the Act, including ADUs (accessory dwelling units)
Properties that are not owned by a corporation, REIT (real estate investment trust) or LLC where one member is a corporation
Property provided by non-profit organizations
Property that is subject to pre-existing local ordinances
I just read a story when I was in NY about a LL that raised rent for the first time in 9 years - $100/month. Tenant said they couldn't afford it. They stopped paying the rent altogether. These people all live in the same house! I don't think you're dumb at all.
Over the past 7 years I have been selling off my 10 rental properties. I now have 3 personal rental properties and one property in my mother’s Trust that I manage. All 3 of my remaining personal rentals are small single family houses of approx 1200 sq ft with a single car garage. They are mortgage free and I have always increased my rents to align with the local housing market. Presently, they are leased at $1575/month. So… suddenly - locally - similar places are renting (since last year when my rents were at market) between $1795 - $1900 a month! $1575 a month gets a small 2 bedroom townhouse with no garage in the zip codes where my properties are.
My tenants are all consistent and all paid through the pandemic without a hiccup. My taxes and insurance are not increasing dramatically. I guess I’m a bad investor, but I am not going to increase rent more than 5%….
I do understand that if the bottom fell on the market and rents slid down a significant percentage that my tenants would demand lower rent or they would move. But in all good conscience , I just can’t see slamming a $200+/month rent increase on people with very modest incomes who pay rent on time and take good care of the place.
Bless you! Wish all LLs felt the same.
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