Owning rental property in California can be great but it can also be challenging for a variety of reasons. Here are some to consider:
- High property values: California is known for having high property values, which can make it difficult to purchase rental properties. The high prices can make it difficult to obtain mortgages. It can also make it difficult to earn a profit from the rental property.
- Strict regulations: California has some of the strictest regulations in the country when it comes to rental properties. Housing Providers must comply with state and local laws. Issues such as security deposit limits, eviction procedures, and rent control. These regulations can be time-consuming and costly to comply with.
- Increasing competition: In recent years, the number of large corporations buying property has increased significantly. This has made it tough for the small mom and pop owners. They struggle to stay in business and add to their portfolio.
- Environmental laws: California has some of the most comprehensive environmental laws in the country. Landlords must adhere to these laws and regulations, which can add costs and complexity to the process of owning and managing rental properties.
- Limited affordable housing: With a lack of affordable housing, many low-income renters are struggling to afford rent in California. This can make it difficult for landlords who rely on affordable housing as the majority of their tenant base, especially if they’re in a area where average rent prices are higher.
- Litigious tenants: California also has a reputation for having tenants that are more likely to take legal action against landlords, which can make it challenging for landlords to navigate the legal system and defend themselves against lawsuits.
It’s important to note that owning rental property can be challenging but also rewarding. Consider all the pros and cons before becoming a rental housing provider.