Home › Forums › Closed Forums › Properties or Areas › AB 1482 Rent Caps – Single Family Homes?
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OnPoint.
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April 22, 2022 at 4:00 PM #23181April 22, 2022 at 6:50 PM #825170
Escoguy
ParticipantHi,
I’m on the other side of this.
I gave my tenant 90 days written notice for a 20% increase.
SFH, owned by individual.
In my case, I hadn’t raised the rent past four years as the tenant had pleaded hardship etc and now that the circumstances have changed in the tenants family, it is time to adjust closer to market.
I’d say if the proper notice is given, there probably isn’t much you can do as far as strict legal recourse.
If you’ve been a good long term tenant with minimal maintenance, there could be a business case to make to keep the rent 5-10% below market as wear and tear is a real cost especially if there are larger families etc.
April 22, 2022 at 7:57 PM #825171
CoronitaParticipantThe sfh you rent is not subject to rent control ab1482.
In fact attached rentals that are individually owned are also not subject to ab1482
Anything else you are trying to do is just trying to stall what is legally allowed by a landlord. Sorry can’t and won’t help you there.
April 22, 2022 at 8:51 PM #825172flyer
ParticipantAs a landlord of sfh’s and other rental properties, have to agree with both of the above.
I’m sure you realize you are living in one of the most competitive property markets in the country, so it’s going to be very difficult for you to negotiate, when there is so much competition for housing.
You are not alone in your concerns, as I hear people who have lived here for years, complaining about how their kids can’t afford to rent or buy a home here, or in many other desirable places in CA anymore, but, again, that’s the market, so it’s a kind of take it or leave it situation.
I wish you the best, and hope you find a solution that works for you.
April 22, 2022 at 9:21 PM #825173SDNative2
ParticipantI’ve been on both ends, and you might have some leverage if your landlord–or their property manager–didn’t send that notice to you or post it on your door. If I remember correctly there was a deadline for that notice to go out last fall or prior (don’t recall). Also check on the San Diego ordinance to see if that also applies to you.
If your landlord didn’t do what they were supposed to, then you do have some room to negotiate if you are a model tenant. Tenants have way more rights in California than landlords. Due to the market and in deference to the other Pigg’s comments here, you might want to ask your landlord to give you stepped-up rent like 10% for 6 months only — which will give you time to find something else if you don’t want to stay.
That’s my two cents…
April 23, 2022 at 3:15 PM #825179gzz
ParticipantYou are going to burn all the good will you have earned by paying on time etc. unless you are about to move out in the next few months, pay up without complaint.
April 25, 2022 at 10:36 AM #825196NeetaT
ParticipantIf it would make you feel any better, calculate how much per month it would cost you to buy the home you are renting compared to your rent. I am not sure about San Diego, but in LA county the average cost per year to own a home is $60,000.00 compared to $34,000.00 to rent that same home. My friend is trying to sell his home in San Diego for $1,500,000.00. The cost per month for the new owner would be approximately $7,800.00 per month using a conventional loan. His home would rent for approximately $4,500.00 per month.
April 25, 2022 at 12:00 PM #825199sdrealtor
ParticipantThose numbers look nowhere near accurate. A home in LA that rents under 3K is likely a 2br condo at most. The owned home considerably more than that. The buyer of a 1.5M home is unlikely a first time buyer and more likely rolling gains over from another home and putting considerably more than 20% down. For many of us we do not view our homes as investments but rather a store of value and assets accumulated over time. I know I never expected to do anything more than payoff my home and have a safe, secure place to ride out my days then pass on to my kids.
April 25, 2022 at 6:08 PM #825207ParticipantNeeta, I don’t agree with comparing the 4500 and 7500 figures.
1. A lot of the 7500 is tax deductible. With typical assumptions that is more like 5400 after tax.
2. Rents go up, mortgages typically go down from refinancing to lower rates or extending terms.
Rents as I noted are mooning but we don’t even know what market rents are anymore due to the statewide rent control. Even though it is full of exceptions, it still restrains their rents since exempt units have to compete with below market non-exempt.
Ultimately the law will only delay and smooth out rent increases. Non exempt units will raise rent by the max every year until they reach market rates.
It is also a wakeup call for soft landlords like myself of the risks involved in letting a rental get too far below market. No more “I can raise it later on if I meed to.” No telling when rent will be legally locked down. And there are definitely major landlords now subject to rent control who are far below market. E.g., Ocean Beach complexes with 1-bedrooms for $900-$1200 a month that would easily go for $1800-2200.
April 25, 2022 at 6:16 PM #825209ParticipantWith the increase in the standard deduction and salt limits tax benefits aren’t what they once were. It’s $25,900 now for married joint so you don’t accrue benefits until you pass that and only on what’s in excess of that
April 25, 2022 at 6:30 PM #825210
barnaby33ParticipantSALT limits?
JoshApril 25, 2022 at 7:17 PM #825211CoronitaParticipant[quote=gzz]Neeta, I don’t agree with comparing the 4500 and 7500 figures.
1. A lot of the 7500 is tax deductible. With typical assumptions that is more like 5400 after tax.
2. Rents go up, mortgages typically go down from refinancing to lower rates or extending terms.
Rents as I noted are mooning but we don’t even know what market rents are anymore due to the statewide rent control. Even though it is full of exceptions, it still restrains their rents since exempt units have to compete with below market non-exempt.
Ultimately the law will only delay and smooth out rent increases. Non exempt units will raise rent by the max every year until they reach market rates.
It is also a wakeup call for soft landlords like myself of the risks involved in letting a rental get too far below market. No more “I can raise it later on if I meed to.” No telling when rent will be legally locked down. And there are definitely major landlords now subject to rent control who are far below market. E.g., Ocean Beach complexes with 1-bedrooms for $900-$1200 a month that would easily go for $1800-2200.[/quote]
Gzz. Sorry, there’s a lot of problems with your post. First of all, this rent control law really isn’t rent control for most private individuals .. most private landlords whether it’s detached or attached are exempt from this law. Second, this law only governs how much you can raise rents by per year that it applies to, mainly commercial/corporate landlords of large complexes. Provided those entities regularly raise rents to keep it up to market rates, this shouldn’t even come into play.
Most corporate landlords already regularly raise rents annually or biannually already, so it’s unlikely these corporate entities would be that far below market rental prices each year. Usually, individual landlords are the ones that offer below market rates for good tenants and this rent control law doesn’t apply to most of them.Also rent is not mooning, in fact supply constraint like in UTC clearly shows, rent is going up quite a bit.
April 25, 2022 at 7:27 PM #825212CoronitaParticipant[quote=barnaby33]SALT limits?
Josh[/quote]Yes, if you itemize, federal taxes limit your total itemized deduction for state income tax, property tax, personal use tax to a maximum of $10k (I forget what SALT stands for but it’s the amount you can deduct for your state income tax and property taxes)
A standard deduction is now $25.9k … So unless your annual mortgage interest on your primary is more than $15.9k, or unless you have larger itemized deductions elsewhere (like charitable contributions), you would be better off taking the standard deduction versus itemizing your deductions …and then if you take standard deduction, the SALT deduction wouldn’t even come into play for your federal taxes. Examples for where you would take standard deduction is that if you either have no mortgage on your primary or are close to paying it off such that the annual mortgage interest on the remaining loan is very low….because again before with SALT, you could deduct the full amount of your state income tax paid that years now you are limited to only $10k for that category, which I’d you have no mortgage and not significant charitable contributions, would make it much less than the 25.9k standard deduction.
Now you can always take standard deduction for federal and itemize your CA state taxes where SALT is still deductible fully, subject to AMT.
Also for rental properties, 0roperty taxes and mortgages are fully deductible as the cost of doing business with your rental.
April 25, 2022 at 8:05 PM #825213ParticipantAnd even if you have $50K in itemized deductions you were getting the first 25.9K anyway so the incremental benefit is only about $24K write off not the whole $50K which gzz should know already
With my mortgage as small as it is and lacking any significant medical bills I could itemize Im close to the point of not itemzing anymore. Then again with a small mortgage thats a high class problem
SALT = state and local taxes
April 26, 2022 at 9:05 AM #825214CoronitaParticipant[quote=sdrealtor]And even if you have $50K in itemized deductions you were getting the first 25.9K anyway so the incremental benefit is only about $24K write off not the whole $50K which gzz should know already
With my mortgage as small as it is and lacking any significant medical bills I could itemize Im close to the point of not itemzing anymore. Then again with a small mortgage thats a high class problem
SALT = state and local taxes[/quote]
One of the things that’s important to remember is that while you can take standard deduction for federal it often makes sense to take itemized deduction for state because salt caps don’t apply to state taxes. I forgot about that last year where using TurboTax because I always take standard deduction now without a mortgage I just assumed that I would take standard deduction for state and didn’t bother to put in my property tax etc For my state tax calculations. It turns out that itemizing my state taxes would still be better than taking the standard deduction for my state taxes so it looks I’ll be filing an amendment for my state taxes for 2020. This year it will be different because I did a cash out refinance on my primary so I can itemize, except my mortgage interest is not deductible under primary residence It’s deductible as investment interest expense which isn’t as good as if I were able to deduct it as a mortgage interest to spend on my primary but still it makes now sense for me to itemize my deductions for federal this year.how to use the cash out refinance to buy a new rental property right away I could have used the mortgage interest as expense for the new rental property even though the mortgage is taken out on the primary as a cash out refinance oh well
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