Navigating San Diego’s Declining Rental Market: What It Means for Renters & Landlords!

How can I price my rental? Welcome back Inside Uplift Property Management and today we're going to be talking about navigating a declining rental market.

So the current market reality here in Southern California is we're seeing increased competition it's a very price sensitive Market people are looking for those deals.

Declining profit margins um and this is you know for the majority of our owners we're seeing those profit margins start to to decrease and we're coming off years of record high rents and you know year over-year as we're increasing rents eventually that has to stop and and we're kind of at that moment where we're seeing a kickback in the market um and we're going to start seeing those rental rates drop.

Some external financial pressures that everybody's going to see first and foremost the rise of property insurance specially now after these fires that have gone through Southern California we can expect property insurance to go up we can expect fire Insurance to go up the next cost that we're going to see is increased property taxes and expect to see those HOAs if you live in an HOA Community their insurance is going up too so expect to see higher HOA dues maintenance seems every single year it seems like maintenance is getting more and more expensive same with those vendors they have their cost to pay uh expect to pay more for maintenance vendors and then also here in California we have a lot of ant anti landlord legislation so that's something to always stay on top of you can always check out our website and our our blogs to see what new laws are in effect that might be affecting some of your your profit margins and how you can increase rent.

So and that brings us to why competitive pricing matters like I said before this is a sensitive Market people are looking for a deal so what we've been communicating to our owners is price competitively uh when we're looking on Zillow and we're looking at at different uh comps um I really like to to dive into those comps and see you know what the prices of of other rentals in the area but also how many applications do they have how many views how long has it been on the market and that'll give me a good indicator of okay hey we have a unit at 2500 and they're starting to get some views I want to come in under 2500 2400 that way we can rent your unit quickly we can avoid that loss to lease.

Key strategies for Market marting your unit competitively like I said before we want to research the market make sure we're coming under other other units available adjust that pricing right so if you have your your listing on the market for a week and you're not getting any views it's listed too high and you need to drop your pricing offer incentives so move in specials that moving from place to place can be really stressful with security deposits first month's rent you know there's a lot of financial responsibility that goes into moving so any you know incentives 500 off your first month's rent anything like that is really going to draw people to your unit and then lastly focus on value you know in your listing really highlight the things in your unit that you know separate yourself from other people so make sure we're focusing on value.

Balancing cost and revenue a few things we want to do is we just want to monitor expenses make sure you're keeping a detailed accounting of what's going on in your unit preventative maintenance those little things really build up so make sure we're getting in there doing preventative maintenance to avoid a huge maintenance Bill and lastly just plan for those Rising costs uh vendors Insurance all the things we've talked about work that into your budget that way it's not a surprise uh when those things start to increase.

looking to the longterm you know you really want to focus on occupancy uh try to avoid tenant turnover now is the time to do that more than ever uh you want to build those tenant relationships it's really important um that your property manager or yourself is is keeping a good relationship with tenants prepare for recovery so we're seeing a lot of increase in prices but it's it's not going to happen forever we're seeing decrease rent it's not going to happen forever so just hold in there you know things will get better and just be sure to adapt and stay on top of all those legislation changes.

So in conclusion, yes it's a declining market and yes we're seeing prices rise uh but as long as you plan correctly you budget correctly um only rental unit can can be a joy so um if you have any more questions about what's going on in the market or how to price your unit competitively feel free to give us a call here at uplift we'd love to talk it over with you.