Friday, July 5, 2019

U.S. Apartment Demand at Five-Year High

There's never been a better time to rent out your apartment - at least not in the last decade or so! According to the Wall Street Journal, demand for apartments in the U.S. reached a five-year high this spring. Cal Bay Property Management's Scott Safadi has witnessed the local rental market explode through the years. As the Bay Area has increased in popularity, so too has the demand for rentals.

Given the healthy state of the economic climate, it's safe to assume that investing in property development and rentals is a smart move. Even if the five-year peak won't be topped any time soon, the market shows no sign of slowing down. While it's impossible to predict the future, it's important that property owners understand just how great the apartment demand in the Bay Area truly is at the moment.

Because there is such high demand, many of the most challenging aspects of being a landlord disappear. You'll rarely, if ever, need to worry about vacancies. Nor will you need to attract leads or go through complex screening processes. In fact, if you partner with the right property management company, you can hand off all these tasks for as long as you'd like.

If you're considering renting out your apartment building or multifamily community, consider partnering with Cal Bay Property Management. Locally-owned and operated, we've got the insider's advantage you'll need to stay successful regardless of the market.

- Scott Safadi, Cal Bay Property Management

Sunday, June 30, 2019

San Jose, Housing Affordability, and the Future of Multifamily Housing

The housing market in San Jose has been competitive for more than a decade. Even in slower economic times, home prices have limited the working class from buying. Now that First American Financial Corp. has declared San Jose's housing affordability the most improved in 44 markets, many believe multifamily communities are on the way out. While it's true that some home buyers will benefit from the latest San Jose market trends, the reality is that just six or seven percent of current renters will be able to afford to purchase a house in the area.

Cal Bay Property Management's Scott Safadi has watched the San Jose cost of living rise through the years, and urges property owners to take the news with a grain of salt. While it's certainly good news that housing is becoming more affordable for the community at large, the reality is that multifamily communities will always be needed. This is especially true of areas like San Jose, which naturally attracts a lot of young professionals not eager to settle down.

While it's true that the Bay Area housing markets look quite different than they did ten years ago, one truth remains: it's incredibly pricey to own a home here. Young people, families and seniors on a fixed income will be searching for rentals they can afford. If you've been wavering between investing in your rental property or selling, you may want to reconsider, as there won't be a shortage of tenants any time soon.

With the right property management team on board, area landlords can earn easy, passive income for years to come. Of course, nobody knows precisely what the future holds, but so long as the Bay Area continues to attract tech companies, startups and the young professionals who work there, Cal Bay Property Management will be ready to take up the daily operations of running rental properties.

- Scott Safadi, Cal Bay Property Management

Thursday, June 20, 2019

The Future of the Bay Area for Moderate Income Families

San Jose officials say that without intervention, moderate-income families may be priced out of renting or buying in the area altogether. The news will come as no surprise to locals who are likely all too familiar with the challenges of the Silicon Valley real estate market. Cal Bay Property Management's Scott Safadi has watched the evolution of San Jose's housing crisis. While government intervention could help save the shrinking middle class, landlords and property owners may feel frustrated by the slow pace that city council operates at. 

To understand the challenges these families face, it helps to define moderate income. It's a subsection of the middle-class making between 81 and 120 percent of the area's median income. For San Jose, that's $135,250 for a family of three. Not the group typically associated with government handouts, these people often struggle to qualify for low-income housing. With no option but to pay expensive rent or mortgage costs each month, many opt to move in with roommates to help ease the financial burden.

While roommates are one option, it's important for moderate-income families to have a space of their own. Landlords and multi-family property owners in Silicon Valley may be eager to find quality tenants, but taxes, maintenance costs, and other factors drive up the average rental prices. This makes it difficult to turn a profit, especially as the area's cost of living continues to climb. 

Whatever the San Jose city council has in store, area property owners and landlords will have their eye on the moderate-income group. 

- Scott Safadi, Cal Bay Property Management

Friday, June 7, 2019

How Not to Implement a Rent Hike

The Bay Area has many charms. Beautiful landscapes, rich cultural opportunities and a plethora of job opportunities make it appealing to people of all backgrounds. Unfortunately, though, the Bay Area isn't without its drawbacks. While tech companies have added tremendous value to the region, they've had a serious impact on the local rental markets. When Facebook moved into east Menlo Park, one tenant saw her rent jump $800 over a one-month period. 

Cal Bay Property Management's Scott Safadi was consulted for the story. When companies like Facebook come to town, property values increase, causing owners to sell multi-family apartment buildings based on full occupancy at market rates. New owners will be quick to raise rent in order to pay off the loan they used to purchase the property.

“The guy who sells the building wants as much as possible from the sale. And so the buyer says, ‘I need to get as much rent as possible to make up for this purchase,’” Safadi shared in the Palo Alto Daily Post.  

While this strategy makes sense for the property owner, it can cause financial hardship for tenants. If you're hoping to implement a rent hike, it's best to roll out the changes gradually. Above all, keep tenants in the loop about your plans. By increasing rent over several months, renters will be able to plan accordingly. This leads to less turnover and less work on the part of the landlord.

As with most things in life, the golden rule comes into play. By treating tenants with the same respect you'd expect in return, you can maintain a cordial relationship no matter what you're charging per month.

- Scott Safadi, Cal Bay Property Management

Thursday, May 30, 2019

This Airbnb Killer Could be Bad News for the Bay Area

Airbnb has forever changed the landscape of tourism and short-term rentals. While there is no denying their success, the company's impact on communities has been frequently criticized. A new competitor could change the way Airbnb does business in the San Francisco area, but Cal Bay Property Management's Scott Safadi cautions anyone celebrating the new company's arrival in our part of the world.

WhyHotel is a Washington, D.C.-based startup that connects with luxury apartment tower developers to develop pop-up hotels in empty units. Since it can take developers several years to fill up vacant units, many are eager to take advantage of the new service. Offering maid services and 24-hour front desk support, these new pop-up hotels look and feel like any other. The only difference? They won't typically remain open after 24 months.

While the idea is innovative, WhyHotel could have an Airbnb effect on the greater Bay Area. Short-term rentals hurt lower and middle-class families searching for affordable housing. While the use of empty luxury apartment units as hotel rooms may not immediately impact individuals searching for affordable housing, it has the potential to drive up tourism costs. The trickle-down impact of the service could be significant.

No matter how you feel about short-term rentals, there's no denying their influence on housing markets. Investing in a multi-family property is typically a better use of your money and has a better impact on your community. While you may not necessarily have empty luxury apartment units to rent out, it's worth considering how WhyHotel could impact your property and the housing market at large.

- Scott Safadi, Cal Bay Property Management

Thursday, May 9, 2019

Earthquake Preparedness Tips to Share with Your Tenants

It's easy to take disaster preparedness for granted, especially when it comes to rental properties. While you might be well-versed in the tips and tricks necessary to prepare for earthquakes, your tenants may not be as familiar. Scott Safadi of Cal Bay Property Management recommends all property managers review these earthquake preparedness strategies with their tenants:

Hang Shelves and Picture Frames Away from Seating Areas
When an earthquake occurs, what items in your home are most likely to topple? While framed photos might look great over your couch, they are likely to fall on those seated below should an earthquake occur. Decorate with fabric wall hangings and tapestries and save framed art for less accident-prone locations. 

Store Fragile Items Low to the Ground
While this tip might seem like common sense to anyone who has ever lived in an earthquake-prone region, those who are new to town might have missed the memo. Encourage tenants to store glass vases, expensive china and other delicate items on the lowest shelves possible. 

Prepare Your Earthquake Kit
In many cases, earthquakes knock out power in just a few moments. You'll want to stock up on non-perishable food just in case. Bottled water, batteries, first aid materials and alternate power sources like portable cell phone chargers are all great to have on hand in an emergency.

Drop and Cover
Should an earthquake occur, you'll want to be as low to the ground as possible. Because the likelihood of something toppling and hitting you on the head dramatically increases during an earthquake, make sure you're covering yourself as you duck!

No matter how prepared you assume your tenants might be, checking in with them about a few basic principles of safety can save lives!

- Scott Safadi, Cal Bay Property Management

Thursday, May 2, 2019

Damage-Free Bathroom Ideas for Renters

Strict rental agreements can kill the vibe of DIY-loving tenants. Pre-existing fixtures, storage and color schemes limit the options for personalizing a rental home, and it's hard to feel fully at home in a place you can't customize. Thankfully, there are some tips, tricks and projects that won't sacrifice your security deposit. Scott Safadi of Cal Bay Property Management recommends the following ideas for your rental home:

Add Storage

There's rarely enough storage in a bathroom. Between a person's self-care products, their bath towels, cleaning tools and bath accessories, the sheer amount of space taken up can feel overwhelming. While it might be nice to tear out a wall and install built-in shelving in your bathroom, opt instead for an over-the-toilet shelving unit. Display clean towels, candles or keep spare toilet paper handy in a spot that won't damage your rental!

Change Up the Lighting

Bathroom lighting is crucial for anyone paying attention to their hair and makeup. Too often, the light fixtures found in rental homes and apartments are yellow-tinged. If you've grown frustrated with the lights in your rental's bathroom, consider adding in a floor lamp by your mirror. No room for a lamp? Swap out your bathroom lightbulbs for LEDs. They burn more brightly white than your average lightbulb!

Hang Art You Love

Blank walls can feel lonely. Add some life to your rental's bathroom by hanging up pieces of art you're inspired by. Pops of color can breathe life into otherwise boring bathrooms! Before driving a nail through the wall, though, check your lease for your landlord's policy on decor. Damage-free double-sided tape may be a better option!

- Scott Safadi, Cal Bay Property Management


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