How to Manage Your First Rental Property in California

Purchasing and managing your very first rental property is no easy undertaking. It inevitably comes with some risk and a lot of responsibility. However, there’s a reason people continue to invest in property and manage them as rentals: to reap the undeniable rewards.

When it comes to managing rental properties in California, there’s a lot you need to know. From how to purchase a property to the ins and outs of managing your rental, it can seem daunting at first.

So, whether you’ve already invested in your OC rental property or you’re considering a purchase, here are some important things to know about managing your first California rental property.

Should You Invest in a Rental Property in California?

California has an extremely robust housing market. Even though events like the Covid-19 pandemic caused uncertainty in the market, it rebounded exceptionally quickly and continues to boom.

Experts continue to recommend California as one of the best areas in the country to buy property. Prices (and rents) continue to rise steadily, providing positive returns for investors and as safe a bet as you can get when it comes to property investment. While it might be competitive to buy in California, it’s a safe bet and worth the time it may take to find the right investment rental property for you.

How to Buy a Rental Property

The process of buying a rental property can be a little complex to navigate, especially for those new to it. You’ll need mortgage approval, an understanding of your eligibility for agency loans, and the ability to predict your return on investment. At the crux of all this is identifying the right property.

Find the Right Property

The right property is one that you are:

• Able to afford
• Qualified to purchase
• Confident on earning a high ROI

Within these factors, you want to be sure that you fully understand the market. Nobody wants to invest in a rental property only to find that the locale they’ve chosen isn’t producing the yields they expected. Another thing to look out for is the quality of the property. Will it need a lot of work before it’s fit for the rental market? Avoiding “fixer uppers” or properties with serious issues means you don’t have to sink significant chunks of cash into repairs. Plus, your property will be ready for the rental market much faster.

So, above all, it’s essential to do your research on the county, neighborhood, and individual property before purchasing.

Check For Vacancies on Our Website

If you have a property in mind but you’re unsure of the type of rent you’ll be able to charge, a good place to start is the Vacancies page on our website. You can also download recent market reports to understand the current rental market more fully.

How to Manage Your First Rental Property

While finding a new property to buy can be an exciting process, it’s important to be as prepared as possible for what comes next: stepping into your new role as a landlord. Preparing for the many obligations and requirements imposed by government authorities on landlords ensures you’ll be ready to take it all on. Not only is this important for attracting the best tenants to your property, but it ensures a productive and mutually beneficial relationship throughout their tenancy.

Learn About Rental Laws and Insurance

When becoming a landlord for the first time, you need to be aware of the legal obligations placed on you by California law. These laws are not just for the protection of tenants; they provide a clear protocol for you to follow at all times. This can protect you from legal action taken by bad tenants and ensure you know how to handle any tricky situations correctly.

Legal obligations for California landlords include restrictions on rent increases, requirements on the state of the property, how and when you can make inspections, the situations that allow you to evict bad tenants, and much more.

These legal obligations extend to all periods of the rental process, including:

• Fair selection of tenants without discrimination
• Written rental agreements
• Taking the correct security deposits
• Proper upkeep and maintenance of the property and the landlord’s cost
• Disclosure of certain potential issues with the property, such as ongoing pest control
• Providing proper notice of access to the property
• Only evicting tenants for the correct reasons and following the outlined procedure for doing so legally

Landlord laws and regulations don’t just apply at the state level. Individual counties may enforce their own regulations and rent controls. On top of that, there are federal level requirements that landlords are obliged to follow. It’s essential that you understand your legal obligations at all levels of government as a landlord.

Get Your Property Up to Scratch

Nothing can turn a first-time landlord off like a bad tenant. All the excitement of owning a rental property can disappear when you’re dealing with unpaid rent, damage to your property, or evicted tenants who refuse to leave.

So, as a first-time landlord in particular, you want to make sure that you’re attracting only top-quality tenants to your property. Part of that process is presenting your property in the best light possible. Ensure your prospective renters are viewing as fresh and clean a home as possible.

If you’ve purchased a property where the decor and appliances are outdated, it’s worth taking the time to fully refurbish it and install new appliances. Prospective tenants will appreciate a modern home, and you’ll be able to charge a little more in rent. Plus, you’ll be far less likely to receive complaints or phone calls about frequent repairs.

Work with a Property Management Company

There’s no getting around the fact that becoming a landlord is a lot of work. On top of understanding your legal requirements, your landlord duties may take up a lot of your free time. This includes items such as:

• Advertising your property for a new tenant
• Scheduling viewing appointments and showing your property
• Thoroughly screening prospective new tenants
• Drawing up and maintaining all your required paperwork
• Receiving and managing security deposits and rental payments
• Regular inspection and routine maintenance of the property
• Managing issues such as late rent or property damage
• Managing the eviction process when needed
• Starting it all over again when searching for a new tenant

Hiring a property management company takes all of this and more off your hands. This will save you a ton of time and many headaches. Yet, there are lots more benefits to hiring a property management company.

Property managers are experts in their field. They have connections in the industry, they understand exactly how to advertise a property, and they’re well versed in all legal requirements for landlords.

What this means for you is a completely smooth, hands-off process. While property managers do charge fees for their services, of course, they’re well worth the investment for a stress-free rental property.

Another upside is that their expertise ensures you’ll get tenants who stay for longer and have as little downtime as possible between tenants. Their expertise in vetting applicants thoroughly and advertising properties effectively is worth the investment alone.

Benefits of Working with Genuine Property Management

At Genuine Property Management, we service and manage properties throughout the entire Orange County area. We pride ourselves on providing the highest-quality service for landlords and the best value for money.

With Genuine Property Management, you can enjoy month-to-month service without committing to long-term contracts, along with a money-back guarantee. You and your tenants will benefit from our renter’s insurance coverage, 24-hour maintenance portal, advanced screening process, and security deposit insurance.

Plus, we manage all the hard work for you. When it comes to advertising your property and attracting the very best tenants, we’ll write the best descriptions, take professional photography, and create 3D virtual tours.

For help managing your first rental property in California, contact Genuine Property Management today!