Real estate analysts who follow the downtown San Diego market tend to focus too much on property transactions and not enough on the rental market. Most analysts expect current market conditions will continue to favor sellers during the first quarter of 2018, and the rising prices will likely turn some prospective buyers into renters. In late 2017, the average monthly rent payment for one-bedroom apartments across San Diego was close to $1,800. Condo units located in the downtown districts tend to be more attractive and command higher prices, which creates a lucrative opportunity for homeowners who wish to become landlords.
Adhering to good property management practices is the key to making the most of the San Diego rental market. Here are six recommendations new landlords should keep in mind.
1. Communicate with the Condominium Board
The first step is to check the bylaws of the condo association to learn about any conditions that may preclude renting units. Most condo boards require notification of a lease agreement, and some reserve the right to approve tenants.
2. Let Professionals Manage the Property
Many landlords across California do not last beyond their first lease agreement. Although property investment is a passive activity, property leasing requires hands-on management that includes knowledge of housing laws as they pertain to landlord/tenant relations. If a person who owns condos in Gaslamp Quarter is not ready to be a full-time landlord, retaining a property management firm is highly recommended.
3. Make Sure the Home Is Safe
The easiest way for landlords to find themselves in court is by failing to provide a safe dwelling space. If there is anything about a condo that may compromise the safety of tenants, it will need to be corrected immediately. A good idea is to allow a home inspector to evaluate the unit in terms of safety before executing a rental contract.
4. Screen Tenants
Blindly allowing anyone to rent a condo is never recommended. Tenancy laws in California allow some level of applicant screening, but going overboard and running afoul of these laws could result in a discrimination lawsuit.
5. Have a Contingency Plan in Place
Renting a condo is a business activity that can either create profits or generate losses. As with all other business activities, landlords should have a contingency plan to minimize losses in worst-case scenarios such as a fire, death of a tenant, appliance theft, and heavy deterioration of the property.
6. Maximize Rental Profits
Downtown San Diego condos are inherently marketable, but they can be transformed into profit machines with the right adjustments. If the condominium tower has a luxurious reputation, higher rental payments can be obtained with features such as smart home automation, a mature edible herb garden, high-end appliances, designer kitchens, and wine cabinets. If the condo building offers broadband internet service, this could be marketed to attract tenants with deeper pockets.
If you’re thinking about purchasing real estate for sale in Core San Diego or another neighborhood in downtown with the intention of becoming a landlord, get in touch with the trusted local agents at 92101 Urban Living to help you find the perfect properties to rent out. Give us a call today at 619-649-0368 to schedule an appointment.