How are rents and the real estate market as we head into Q2 of 2024? Let's find out!

Navigating the LA Rental Market in April 2024

So far, the Northern Los Angeles rental and real estate scene in 2024 is a mixed bag, offering both opportunities and challenges for those looking to make the most out of their investments. Here’s a snapshot of what’s happening and how you can stay on top in one of the US’s priciest markets.

What's Happening in the Rental Market?

Right now, the median rent in Los Angeles is pretty steady, not showing much change from last month. However, in the northern parts of LA, rents have slightly dipped by about 1.6% over the last year. Despite these dips, LA is still one of the most expensive cities for renters in the US, with rents 49.7% above the national average.

In a positive twist, rents nudged up by 0.2% in February, hinting at a potential turnaround after a few months of decline. This is a good sign as we head into the busy spring rental season. But don’t expect a massive boom – the focus should really be on making your rental stand out through great amenities, especially since renters are all about getting the best value for their money.

The Bigger Picture in Real Estate

The supply of available properties in Southern California is tight, with just about 3.2 months' worth of homes on the market. This means we’re getting closer to a balanced market but expect some upward pressure on home prices.

With interest rates still high and renters hesitating to buy, it's tough to predict exactly how this will play out for rents. But, with an improving outlook and spring on the horizon, we might see a steady uptick in rental demand.

Advice for Landlords and Investors

In this market, it’s all about the extras. Amenities can really set your property apart and keep it competitive. As we dive into the active spring season, take a good look at your properties to see where you can add value and attract top-notch tenants.

Wrapping It Up

The rental market in as we head into Q2 of 2024 is complex, but not without its opportunities. Keeping up with trends, focusing on property features, and being adaptable are key. With a strategic approach, you can navigate the ups and downs and make the most of your investment in one of the nation’s hottest markets.

In its centennial year, the Montrose Verdugo City Chamber of Commerce awards SIG with "Business of the Year"

Last week marked a significant milestone for SIG Property Management as we were honored with the prestigious "Business of the Year" award by the Montrose Verdugo City Chamber of Commerce. The event, which celebrated the centennial anniversary of the Montrose Chamber, took place at the elegant La Canada Flintridge Country Club and was attended by numerous local business leaders and government representatives. Our owner, Mike Shaar, accepted the award on SIG's behalf, and the recognition was a testament to his dedication and commitment to community involvement and improvement.

The award ceremony was a grand affair, set against the backdrop of the lush La Canada Flintridge Country Club. The picturesque surroundings served as the perfect venue to celebrate a century of the Montrose Chamber's contributions to the community. The Chamber has long been an advocate for community betterment and involvement, making this award a true reflection of SIG Property Management's values.

The event brought together a diverse and influential group of individuals, and was filled with inspiring stories of community engagement and a testament to the positive impact businesses can have on the places they call home.

SIG Property Management's journey to being named "Business of the Year" was marked by a deep commitment to the Montrose community. Since Mike founded the company in 1991, SIG has demonstrated a steadfast dedication to enhancing the quality of life for its residents. From hosting community events to actively participating in local initiatives, SIG understands that it's not just about managing properties; it's about building a sense of belonging and fostering a spirit of togetherness within the areas we serve.

We like to think that this award serves as a reminder that businesses have the power to make a meaningful difference and leave a lasting impact on our communities.

Simplifying Rent Increases in California: A Guide for Property Owners

If you're a property owner in California, you're likely aware of the unique challenges and regulations that come with the territory. In this blog post, we'll provide you with a comprehensive guide on how to raise rents in California, touching on various aspects such as lease agreements, notice requirements, maximum allowable increases, and tenant rights.

Step 1: Review the Lease Agreement

Your journey to a rent increase begins with a thorough review of your lease agreement. Understanding the terms and conditions of your lease is crucial, as it forms the basis for any changes in rent. Some leases may allow for periodic increases, typically on an annual basis, while others maintain a fixed rental rate for the entire lease term.

Step 2: Understanding Rent Control Laws

California's rental laws are known for their complexity, with rent control ordinances varying from city to city. These ordinances may impose restrictions on the amount and frequency of rent increases. Property management professionals are well-versed in local regulations and can help you navigate these intricacies to ensure you're in compliance.

Step 3: Adhere to Notice Requirements

In California, the notice period for rent increases depends on the percentage of the proposed increase. A 30-day written notice is required for increases of less than 10% of the current rent, while a 60-day (and in some cases even a 90-day) notice is necessary for increases of 10% or more. Property management professionals can ensure that you provide the appropriate notice to your tenant, adhering to legal requirements.

Step 4: Determine the Maximum Allowable Increase

Although California doesn't have statewide rent control for properties built after January 1, 2005, some areas have local ordinances that impose limitations on rent increases. Property management professionals have access to market data and can help you determine a reasonable and competitive rent increase that complies with local regulations.

Step 5: Properly Format the Notice

The written notice provided to your tenant must contain specific details, including the current rent amount, the new rent amount, the effective date of the increase, and, if required, a statement explaining the reason for the increase. Ensure that these notices are drafted by professionals in order to meet compliance with state laws and local regulations.

Step 6: Ensure Proper Delivery of the Notice

To maintain legal compliance, landlords must serve the rent increase notice using approved methods, such as certified mail with return receipt requested, personal delivery, or other legally accepted means. A property management professional can expertly handle this process, ensuring all documentation is properly maintained and delivered.

Step 7: Timing of the Rent Increase

Careful timing is essential to avoid prorating rent for partial months. Property management professionals are skilled in coordinating the effective date of the rent increase to align with lease terms and prevent confusion.

Step 8: Addressing Tenant's Rights and Negotiations

Tenants have rights when it comes to rent increases, including the option to accept, negotiate, or terminate their lease if they disagree with the proposed increase. Property management professionals can serve as intermediaries in these discussions, working to maintain positive landlord-tenant relationships and potentially mitigating conflicts.

Step 9: Consultation with Legal Professionals

Property management professionals often have legal expertise or access to legal resources to guide you through the process, ensuring full compliance with California's rental laws and regulations.

Benefits of Using a Property Management Professional

Engaging a property management professional can save you from the complexities and time-consuming tasks associated with managing your rental property. They bring expertise in understanding and adhering to rental laws, handling tenant communication, and ensuring that all paperwork and notices are filed correctly. This can free you from the administrative burden and minimize the risk of legal issues, allowing you to focus on other aspects of property ownership.

In summary, raising rent in California is a nuanced process that requires meticulous attention to detail and compliance with state and local regulations. Partnering with a property management professional can streamline this process, mitigate legal risks, and facilitate effective communication with tenants, ultimately making your role as a property owner less burdensome and more efficient.

If you're ready to simplify your property management tasks and ensure you're in compliance with California's rental laws, consider partnering with a trusted property management company. Your investment deserves the best care, and professionals can provide just that.

To AirBnB or not to AirBnB? That is the question.

When it comes to renting out your property, whether it's a vacation home or an investment property, there are two primary options to consider: short-term rentals and long-term rentals. Each choice comes with its own set of advantages and disadvantages. In this post, we'll delve into the key points to consider when comparing short-term rentals to long-term rentals.

Profitability: A Matter of Management

One of the first factors to evaluate when choosing between short-term and long-term rentals is profitability. Short-term rentals can indeed be more profitable, but there's a crucial caveat: it often depends on whether you're managing the property yourself or utilizing a property management service.

Short-term rentals, like those on platforms such as Airbnb or Vrbo, can command higher nightly rates compared to monthly rents. This can translate to more income in the short term, especially if your property is in a desirable location or during peak tourist seasons. However, the increased profitability often comes with greater responsibilities and expenses.

Managing a short-term rental yourself requires handling tasks such as guest communication, cleaning, maintenance, and marketing. These duties can be time-consuming and may not be suitable for everyone. Conversely, long-term rentals typically involve less frequent turnover and maintenance, making them more hands-off and manageable. If you're willing to put in the effort and time to manage your short-term rental effectively, it can be more profitable. But if you prefer a more passive income stream, long-term rentals may be the better choice.

Time Commitment

The time commitment required for managing short-term rentals versus long-term rentals is another critical factor to consider. It's essential to understand that short-term rentals demand significantly more time and attention.

In a short-term rental, the turnover of guests is frequent, often on a daily or weekly basis. This means you must constantly prepare the property for new guests, handle inquiries and bookings, coordinate check-ins and check-outs, and ensure the unit remains clean and well-maintained. The time investment can be substantial, and it's not uncommon for hosts to spend 10 times more time managing short-term rentals compared to long-term rentals.

On the other hand, long-term rentals typically involve more stable, predictable tenancies. Once a lease is signed, there is less need for continuous involvement, aside from addressing occasional maintenance issues and conducting periodic inspections. This can be a significant advantage if you have limited time or prefer a more passive income source.

Impact on Housing Supply

Another important consideration when choosing between short-term and long-term rentals is the impact on the housing market, particularly in areas with high demand for rental properties. Short-term rentals can potentially limit the supply of available long-term housing.

When properties that could otherwise be used for long-term rentals are converted into short-term rentals, it reduces the number of available homes for individuals and families seeking stable housing solutions. This can drive up long-term rental prices and make it more challenging for people to find affordable and secure housing options.

Many cities and counties have increasingly been implementing regulations to address this issue by limiting the number of days a property can be rented on a short-term basis or imposing additional taxes on short-term rentals. Hosts should be aware of local regulations and consider the broader impact on their community when deciding between short-term and long-term rentals.

In Conclusion

The choice between short-term and long-term rentals ultimately depends on your individual circumstances, goals, and preferences. Short-term rentals can be more profitable if managed effectively but require a significant time commitment. Long-term rentals offer a more hands-off approach and can contribute to housing stability in your community.

Before making a decision, carefully weigh these factors and consider seeking advice from local property management professionals like the team at SIG. By doing so, you can make an informed choice that aligns with your financial objectives and lifestyle. Remember that the real estate market is dynamic, and your rental strategy may evolve over time to suit your changing needs and circumstances.

SIG will now be requiring new renters to provide liability insurance

As SIG continues to grow, so do our services offerings and initiatives. We're happy to announce the implementation of a new requirement that will benefit both tenants and property owner alike: tenant liability insurance.

Over the years, we have seen several instances in which either property owners or residents have been put in unfortunate situations. Sometimes these are caused by the resident, such as a tenant-caused fire or a tenant-caused backup; and sometimes they are just the result of a maintenance issue, such as a main line sewage backup, or roof leaks. 

Future residents will be asked to provide liability insurance with no less than $100,000 to protect the housing provider from tenant related losses. However, we will also continue to recommend (as we always have) that residents purchase renter’s insurance which will provide both liability protection to the housing provider, as well as coverage for the tenant’s possessions. Renter's insurance can even cover some situations in which a resident has to spend time in a hotel due to a fire or flood.

This new requirement will have no cost for our property owners. There is also a zero deductible. The residents will be asked to provide it upon signing of the Lease Agreement. If they do not have it, SIG will place the "liability only" coverage policy, and it will be added to the monthly rent. The total cost to residents for this will be $14.50 per month. If the residents purchase their own liability or renter’s insurance policy at any time in the future, they will just need to upload the insurance to their portal and the SIG charge will be removed the following month. Property owners will not see these charges on their statements as our office will be processing the charges and paying the vendor directly.

This is an exciting initiative that provides more coverage and better peace of mind for both property owners and residents alike. If you have any questions, give us a call!

A Quick Look at the Los Angeles Rental Market This Fall

Staying informed about rental market trends in Los Angeles and Glendale is essential for making informed decisions about your investment properties. Here's an update on the current state of the rental market in the area, along with some valuable insights and advice.

Rents in Los Angeles appear to be stabilizing after reaching their peak in August last year. According to the latest report from Rent.com, rents in Los Angeles, Orange County, and Long Beach have increased by 1.65 percent year over year, which is a lower rate of growth than initially anticipated. Experts in the field suggest that we are returning to the typical seasonal changes seen before the pandemic. Historically, rents tend to rise during the summer and then decline once the school year is in full swing.

John Leckie, a researcher at Rent.com, noted, "We normally would expect somewhere between a 2 to 4 percent increase, but rents continue to grow, albeit at a slower rate."

The recent stabilization in prices is primarily attributed to reduced demand, possibly influenced by a softer housing market and historically high interest rates. Leckie explained that this stabilization reflects a decrease in demand, with fewer people relocating and instead choosing to stay put.

It's important to acknowledge that rents in Los Angeles remain on the higher end, especially considering the significant increase witnessed from 2020 to 2022 when prices surged by over 14 percent, resulting in an estimated $450 per month hike.

In conclusion, while the rental market in Los Angeles has stabilized, it's essential to remain vigilant and proactive in managing your investment properties. By staying informed, you can continue to make sound decisions and maintain positive returns from your income property.

Should you have any questions or require further assistance, please do not hesitate to reach out to our property management team. We are here to support you in maximizing the potential of your real estate investments.

It's been a while but we are back!

Welcome back, SIG!

We shared this video on our YouTube page highlighting a bit of what we've been up to lately. We're so excited for you to be around for this part of our journey and we can't wait to hear from you more!

Watch our videos and subscribe to our YouTube Channel . See you around!

SIG is very proud to announce that we were recognized tonight at the Glendale City Council meeting as one of only 12 companies in the city that has been awarded a Green Business certification!