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Sacramento Duplex Sales Update – Charts and Graphs Below

It’s a Seller’s Market -That’s The Bottom Line – See Below

 

I just ran the data and thought I’d share some of it with you.   If you have been looking for a Duplex for sale in the Sacramento area you know it’s been a little bit difficult.

Here’s an important Market Definition:   Buyer’s market: more than 6 months of inventory based on closed sales.  Seller’s market: less than 3 months of inventory based on closed sales.   Neutral market: 3 – 6 months of inventory based on closed sales

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Months of Inventory based on Closed Sales in June 2020: 1.4

      • Down 58.1% compared to last month
      • Down 17.9% compared to last year

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Duplexes For Sale in June 2020: 50 units.

      • Down 19.4% compared to last month
      • Down 25.4% compared to last year

Duplexes Closed in June 2020: 35 units.

      • Up 94.4% compared to last month
      • Down 12.5% compared to last year

Duplexes Placed under Contract in June 2020: 44 units.

      • Up 69.2% compared to last month
      • Down 2.2% compared to last year

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Finally… the graph below shows that List Prices are going down and Sales Prices are going up.

If you are a Duplex owner in the Sacramento Region and are thinking you might like to sell, I hope you come away with the idea it’s a Seller’s market.   To get an idea of what you might be able to sell for, send an email my way at:

Ed@EdFavinger.com or call/text me at 916.203.1260.

In the Mean Time…?

Make it a Great Day..!

 

Ed Favinger, Broker, CRS, GRI, SFR

Don’t Forget Curb Appeal When Selling a Rental Duplex

First Impressions are Important to Investors & Tenants

I’ve been selling Real Estate Investment properties like Duplexes and Four-plexes in the Sacramento area now for almost 30 years.

It’s always amazing to me how many properties over the years I’ve seen that are on the market where you have junk, debris, non-operational vehicles in the driveway and the usual “over grown” grass/weeds.

Why is that important….?   Because the impression given is that the inside of the property will mirror pretty much what you see on the outside.

When You First Pull Up to a Property – First Impressions: 

If you’re an investor and looking at purchasing a property, do you think a prospective tenant will feel a potential pride of  where they might live if Curb Appeal is poor..?  Furthermore do you think they will want to pay you top dollar rent if the property looks unkempt?

From our Property Management experience the prospective tenant(s) will default to a position that the Owner/Landlord will probably not maintain the property if things go wrong if the Tenant was to make a repair service request.

Property Value is Affected:

In addition to the poor curb appeal when a tenant first pulls up to view it, think about the impact an unkempt yard would have on your neighbors.   For example, if  you currently live in a well maintained nice neighborhood of single family homes and all of a sudden you start see front yards of a few places standing out because they are over run with weeds and debris, increased property values will not be as great largely because of the poor neighborhood perception.

Guess what…? That standard works on Duplex or any other Residential Investment as well.

Call a Property Manager – Let Them Take Care Of it:

Just an FYI…?  A good Property Management company will have a list of preferred vendors to help maintain the property and even notify you if they see something out of place on their weekly route.

Real Estate is a long term deal for the most part, so fix up the front yard now because it will pay you back in higher rents, better quality tenants and higher return at Re-Sale.

Now, if you’re thinking of Selling or even Renting up a unit please call me at anytime at 916.203.1260 for more information about the current rental/sales market.

 

In the Mean Time…?

Make it a Great Day…

 

Related articles

Tenants Have to Follow the Rules or a Termination of Tenancy Could Occur

When Given a Notice to Enter to Make Repairs… Be Available

We recently had the occasion of having to serve a tenant on more than one occasion to allow a Plumbing company entry into his unit to make a repair on a water leak that the tenant originally called in.

The plumbing company made more than a few attempts to get into the unit, but the tenant was never fully cooperative. Plumbing companies and other vendors we use can not always make an “on time” appointment. They will do their best but a lot of times they will have a “window” of time.   For example, “well be there between 9-11”.

Personally I agree with the tenant that if they use a window, it means they have to be there a 9 but the vendor may not show up until 10:30.  However,  that is the environment we live in and while it’s sometimes inconvenient we have to get the repair completed.

When the tenant stood us up again, we gave him a 48 hour notice to enter.

On the day we were supposed to enter, we get there with a copy of the keys just in case the tenant wasn’t home which,  in this case he wasn’t,  although he said he would be.

Here’s a list of the violations of his lease.

  • The Keys We Had Don’t Work – Tenant Changed the Locks
    If you didn’t know, as a Tenant you are allowed to change the locks on your door, BUT, you have to give a copy of those new keys to the Property Manager/Landlord in case they need access,  as was this case. Since the tenant wasn’t there and would not be available, we had to drill out the key and replace the lock.
  • The Tenant had “unauthorized” pets in his unit !
    After we get into the unit we find the tenant has dogs that he never told us about and was not authorized to have.
 So What Can Happen To a Tenant in a Case Like This..? 

The Tenant is going to be given a bill for the replacement of the lock since he didn’t give us a copy.  He also had dogs and never told us or got authorization so he getting a Termination Notice.

The new Statewide Rent Control Law does not come into effect until January 1, 2020, so his “termination of tenancy” doesn’t require any reason for the termination.   This was a tool that made it easier for Landlords to get rid of Tenants who don’t follow the rules.

So the advice I’d give you if you going to be a renter is, please follow the rules.   Most property managers don’t like kicking people out of their homes, but if you don’t follow the rules that is what could happen to you.

If you are an Owner/Investor looking for Property Management Services, please check us out at Haven Properties, Property Management Services 2nd to None.

 

In the Mean Time…?

Make it a Great Day…!

Ed Favinger, Broker, CRS, GRI, SFR

Related Articles

More Rent Control – Now You Must Accept Section 8 Vouchers…?

If you are a Landlord, You Should Pay Attention

With the recent passage of the Statewide Rent Control Act, (AB1482) another recent piece of legislation, SB329 was also recently signed into law by the Governor.

Click here for the notice we got from the California Apartment Association.

Be sure and read the last line of the of the article.

You can be sure because of the ongoing housing crisis that governments are going to be placing more of the burden on Landlords and Investors.

They will be forced to become more of a player/participant as part of the so called “social safety net” the legislators will foist on Landlords/Investors because of their inaction.

While I still believe you can make money in Residential Investment Real Estate if you are not participating to help elect political leaders who understand the problem, more regulations and laws might come into being that you don’t like.

Get your checkbook out and be ready to support the efforts of the California Apartment Association and other groups that are in favor of building more housing and not restricting growth.   If you don’t help get people elected who are committed to increasing the housing supply, it’s only going to get worse for everyone, Owners/Landlords/Tenants and First Time Home Buyers.

Is this the California you want to live in…?

I’d like your comments….

In the Mean Time…?

Make it a Great Day…!

Ed Favinger, Broker, CRS, GRI, SFR    916.203.1260

Related Articles

L.A. City Council Moves to Stop Landlords’ Rent Hikes, No-Fault Evictions Ahead of New State Rules

 

Sacramento Rent Control is here & Statewide – What Are the Rules..?

California Apartment Association Has an Overview

 

Well it’s sad to say, but we’ve entered the area of State Wide Rent Control with the recent passage of AB1482 that was signed into law a couple of days ago by the Governor.

While this law could have been worse, it’s still takes away many protections for Landlords/Investors because they will not be able to easily raise rents to market rates or evict tenants that might pay the rent, but are disruptive to an apartment complex or not following the rules regarding care of their unit.

The real problem is the lack of affordable housing that is caused by the ever increasing regulations and barriers put up by governments, state and local.

I guess one good thing is there is no “enforcement mechanism” in place with this new State law, such as a “rent control board” that was created by the City of Sacramento.  By the way, that Rent Control Board will be funded by Landlords with another Annual Assessment.   So if a tenant has a dispute with you and at the same time owes rent to a Landlord, that tenant can easily get a Rent Control committee to hold a hearing delaying any kind of enforcement.

The rules, procedures and assessment amounts from the City of Sacramento Rent Control Board haven’t been published as far as I know.   So stay tuned and if you’re thinking of buying an investment property there or anywhere else in the State of California, you’ve got to be aware of the new law’s impacts.

You can still make money with investment real estate, but you’ll have to learn the new rules.

Managing a rental will probably be made a little more time consuming so why not hire a Property Manager.   A good one will help make you money and keep you out of trouble.

Check us out at Haven Properties, 916.990.0770 or call me anytime at 916.203.1260 if you have questions regarding Rent Control, the Rental Market or Residential Investment Sales.

Click Here for the INDUSTRY INSIGHTS prepared by the California Apartment Association.

 

In the Mean Time…?

Make it a Great Day…!

Ed Favinger, Broker, CRS, GRI, SFR   916.203.1260

 

 

Rent Control Is Here in Sacramento & Soon Statewide

Get Your Rents Up To Market Now Before January 1, 2020 Because Rent Control is Here.

 

The State of California it looks like is about ready to implement a Statewide Rent Control Law that recently passed both house of the State Legislature and headed to Gavin Newsom’s desk.

According to the Sacramento Bee Article I have here for you, it won’t become law until 1/1/2020.

If you have not raised the rent in a long time my suggestion is to do it now and get it close enough to the current market rent as you can because after the 1st of the year you will be limited in what you can do.

In addition, the more onerous “just cause” eviction will now be a factor in cleaning up a property that needs to rid itself of uncooperative tenants that maybe laying waste to the property and intimidating neighbors.   In the past with situations like this, we’d only have to give a 30 or 60 day “termination of tenancy” notice which had no defense.  It could be for any reason at all.

We rarely ever used that tool, but it did come in handy when we had situations that our Property Management Company encountered from time to time.

CLICK HERE FOR THE SACRAMENTO BEE ARTICLE DATED  SEPTEMBER 12, 2019 09:48 AM 

Now if you think Rent Control is going to help, it’s not.  The people it’s meant to help won’t get it.

Related Articles

CALIFORNIA LEGISLATORS MADE A MESS OUT OF RENT CONTROL. THEY JUST DON’T KNOW IT YET | OPINION – Newsweek, Sept. 13, 2019

California embraces failed rent-control policies at the statewide level – Washington Examiner, Sept. 12, 2019

If you have more questions, please contact me at 916.203.1260 or drop a note at favinger@rwnetwork.com

In the Mean Time…?

Make it a Great Day…!

Duplex Market Still Strong – Low Inventory – Prices Continue Up

Even Fixers Get Multiple Offers..! Just Not Top Dollar..!

I haven’t written an article in a while and thought I’d get back in here and update those of you that follow this blog from time to time

RE-SALE SACRAMENTO AREA DUPLEXES

Duplex sales in the Sacramento Region are still pretty healthy with rising prices and rising rents because of a Strong Economy.

Mistakes I See Sellers Make:

The biggest mistake I see some Duplex Sellers now on the market, is thinking an “as is” sale of a property that has a lot of “deferred maintenance” will sell for just about what a “Fixed Up” property will bring in.Duplexes - 1

Another mistake,  besides not maintaining the property, would be an existing unit Rents far below the market.  The reason usually given is “they are long term tenants”.  This reason ignores the fact when they go to Sell the Duplex, a new owner is going to have to deal with tenants receiving large rent increases.

Why to Avoid Those Mistakes:

Because they haven’t raised the rents during the long term tenancies, these tenants know they have a good deal and never report much in the way of needed repairs and since they always pay the rent on time,  the Seller hasn’t been by the property or maintained it unless it was an emergency.

Because the rents were so low, there was no incentive for the owner to make any upgrades to or any effort to enhance/upgrade.   Most of the time they only made repairs after a complaint.

Example of what I’m talking about:

I’m in escrow now on a Fair Oaks duplex where the HVAC unit will have to be repaired to the tune of $2,000 because the unit hasn’t been serviced in years.  What’s more… Even with this fix, there’s no guarantee and the contractor said you’d be better off getting a new unit.  Had it been maintained and serviced on a regular basis, the unit would have had more potential life and not become an issue in the Sale Escrow.

So the Bottom Line…? 

Prices are going up for sure and if you want top dollar for your investment, you should take an honest look at it and if repairs/upgrades are warranted, do them.  When you then raise the rent, you’ll see most tenants will put up with it because you have maintained it and they are proud to live there.

When you have maintained the Property and maintained Rents at Current Market, you are using the “prudent investor standards”.

By the way… Have you heard Interest Rates are coming down….?

If you’re thinking of Selling or Investing in the area, please give me a call at 916.203.1260.   I’ll actually answer the phone.. Texts will work also.

In the Mean Time…?

Make it a Great Day…!

 

Related stories

City of Sacramento Adopts Rent Control Ordinance BPE Law Group Blog

 

 

 

 

 

Sacramento Duplexes For Sale – Not Much Inventory – Prices Up

Yea… There’s Not Much To Choose From, But,  Rents Are Up Too….

If you are curious about the market regarding Sacramento Duplexes for Sale, I’ve got some recent stats/graphs for you.   We’re still in a Seller’s Market and I think you’ll see the graphs below make the point.  I think they will also change a bit next month.

If you have ever read any of my past articles, I’ve always said  “A nice well maintained Duplex will sell for a pretty good price now with multiple offers”, or something to that effect.   The Duplexes that don’t sell quickly generally have these characteristics.

  • Poor or “Fair” Curb Appeal and General Appearance – Lack Pride of Ownership.
  • Rents that are lower or much lower than Market Rent.
  • Price is not reflective of the above 2 conditions.

Low Rents – Updates/Upgrades:

If you are thinking of Selling your Duplex or for that matter any kind of Rental Investment Property, you might think about upgrading/updating the property a little.

Having the same great tenants over several years time does not translate into a much better positive outcome in the sale if the rents they are paying are only about 1/2 of what the same unit would rent for today.

Generally if you aren’t keeping the rents up, you aren’t maintaining the property because you don’t have the cash flow.   Tenants know when they are getting a good deal.

However, if you are a buyer and make an offer on one of these types of properties I’m describing above, you’ll have to take into account the Updates/Upgrades you might be faced with to get the “higher rents” the Seller says you can get.

We recently were in escrow on a Rancho Cordova Duplex the Seller has owned for almost 30 years.   Both units were in need of work.   One of the units had 6  people living in a 2 bedroom 1 bath unit.   Both units were paying only $800.00 per month when the “market rate” is in the $1,300 to $1,400 range.

The deal fell through because the Buyer wanted an adjustment in the price to reflect the deferred maintenance and the low rents.   The buyer would have to get possession by giving a 60 day notice to terminate tenancy before being able to start the “rehab” process.  The unit would then be vacant for another 30 days at least.   There was too much to over come… Low Rents /Poor Condition/High Price.

Let me know what you think of these stats.

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NUMBER OF UNITS FOR SALE – SOLD- PENDING

Graphics list vs sold 6-10-19________________________________

LIST PRICE TO SALES PRICE RATIO – AVERAGE DAYS ON MARKET

List Price to Sales Price Ratio

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If you are thinking of Buying a Sacramento Duplex you want to take into account not only the condition, but the existing tenants and their current rent as well.   As long as you are aware of these issues, you’ll make a better informed decision on whether to go through the deal or not.

In the mean time…

Make it a Great Day…!

Ed Favinger, Broker, CRS, GRI, SFR  – 916.203.1260 – favinger@rwnetwork.com

Related stories

Sacramento had state’s 2nd highest rent increase. But there’s good news for tenants too Sacbee.com

Thinking about moving to Sacramento…?  SFGATE.COM

 

Bread and Butter Sacramento Duplex for Sale

Your Basic Sacramento Duplex for Sale.

You’ve got to check out the Duplex for Sale at 7312-7314 Arleta Court in Sacramento we just listed a couple of days ago.

It’s on a nice Leafy green Cul-de-Sac location with other like kind duplexes.

CLICK HERE for a link to get Cash Flow Figures, Rental Survey and more pictures of the property and the surrounding street.

If this Sacramento Duplex interests you, please call or send a text to me at 916.203.1260.   You can also send an email to:   favinger@rwnetwork.com

In the Mean Time…?

Make it a Great Day…!

Ed Favinger, Broker, CRS, GRI, SFR, CDPE

 

Multi-Family Residential a Favorite for Investors

Late Cycle Real Estate Investing Strong

I thought I’d share an article from Bisnow.com.   You can subscribe I think for free and they will send you information to your inbox with Real Estate and other business news.

The reason I thought I’d share this is because many people I talk to,  including other Real Estate professionals, have the feeling the Real Estate Market is slowing down.Late cycle investing Bulls and Bears

However, the BisNow article points out the trends just before the great recession and the trends of today, especially when it comes to Multi-Family Residential,  are much different.

I share the optimism of the writer of the article because it applies to all residential income properties in this area at least, in my opinion.  Those types of properties include Single Family Homes, Duplexes, Four-Pelxes and Apartments.

They just can’t build enough units but they are trying.

Click here for the BisNow article.

Click here for a local Sacramento Business Journal Article regarding new construction of Apartments in the Region.

So if you’re on the fence about Investing in a Duplex, a Four-Plex, a Single Family Rental or an Apartment complex, please contact me today at 916.203.1260 or drop a note my way via email at: favinger@rwnetwork.com

In the Mean Time…?

Make it a Great Day…!

Ed Favinger, Broker