June 2024 Rental Market Update and AB12 Recap: Key Changes Ahead

As we pass through June, we're excited to share some key updates about the rental market and important legislative changes that will affect investment property owners and landlords. Here's what's new:

Market Update: The rental market is on the rise and ramping up! We’re experiencing a 5.9% vacancy rate across our portfolio, which is lower than the county’s average of 7.5%. This uptick in market activity indicates a strong demand for rental properties, presenting an excellent opportunity for property owners to maximize their income. Our goal is to reduce our vacancy rate even further, aiming to be under 5%, ensuring that our properties remain highly attractive and occupied.

Several factors are contributing to these positive trends:

• Increased Demand: As we head into the summer months, rental inquiries are surging, and more people are looking to move.
• Families Moving: With the school year ending, many families are taking advantage of the summer break to relocate, contributing to higher rental demand.
• Competitive Pricing: Our strategic pricing adjustments are attracting a wider pool of potential tenants, ensuring our properties remain in high demand.

This favorable market condition underscores the importance of maintaining and presenting your properties in the best possible light. Ensuring timely maintenance, offering attractive rental terms, and showcasing your property's best features can make a significant difference in securing quality tenants quickly.

For a comprehensive analysis and more detailed information, be sure to check out our public-facing market update on our website.

HVAC Units Under Extra Pressure: As the temperatures soar above 100 degrees, our HVAC units are under significant pressure, leading to an increased number of service calls. Currently, we are receiving 5-8 calls per day for HVAC-related issues. Our strong relationships with local HVAC companies are proving invaluable, as they are doing an amazing job ensuring many of our tenants receive same-day service to maintain their comfort and satisfaction during these scorching days. Additionally, we are pleased to report that most parts are readily available, with no significant delays due to shipping issues or COVID-19 impacts. This efficient service is crucial in keeping our tenants happy and ensuring their living conditions remain optimal during this hot spell.

Home Warranties and Service Delays: For those of you with home warranties, it's important to note that these providers are currently struggling to find service providers, often resulting in tenants having to wait up to seven days for the first visit. In some cases, we have to step outside the home warranty providers to ensure timely repairs. While home warranties might seem like a cost-saving measure, they can lead to frustrated tenants and increased vacancies when repairs are delayed. Ensuring prompt and efficient service is key to tenant satisfaction and retention, ultimately protecting your investment.

California's Assembly Bill 12: Starting July 1, 2024, Assembly Bill 12 will bring significant changes to security deposit requirements for rental properties. Here's a summary of what you need to know:

• General Limit: Security deposits are capped at one month's rent for most landlords.
• Exception for Small Property Owners: Owners who are natural persons or part of an LLC with no more than two residential properties (up to four units total) can request up to two months' rent. This does not apply to active service members.
• Equal Application: The law applies equally to furnished and unfurnished properties, removing the previous allowance for up to three months' rent for furnished units.
• Pet Deposits: These are now included within the general security deposit cap.
• Rent Payments: While landlords can still collect the first month's rent upfront, they cannot demand the last month's rent in advance as part of the security deposit.
• Compliance Encouraged: We urge landlords to comply with these new regulations and focus their creativity on more productive endeavors.

As we navigate these changes brought about by Assembly Bill 12, our priority remains clear: to streamline the rental process for both property owners and tenants, ensuring mutual benefits and sustained success. Authority Property Management is dedicated to adapting proactively to the evolving real estate landscape, always with the aim of maximizing the value and appeal of your investment property.