Wishing everyone a Happy Thanksgiving from Cal Bay Property Management. Scott Safadi will be sharing the holiday with his wife and two daughters. Cal Bay Property Management will be closed on Thanksgiving, but as always, we are available for tenant emergencies 24/7.
Scott Safadi of Cal Bay Property Management does not recommend making business deals over text. In fact, he doesn’t like text messaging in business at all. If you want to go electronic, stick with email. Emails don’t leave your inbox until you move them. Text messages come and go like the breeze.
If you insist on handling your dealings over text, be aware that a text message can be considered a legal binding contract so when conducting business over text, make sure not to make promises you do not intend to keep.
Scott Safadi founds this article about some recent court rulings where the courts determined that a text message was a binding legal contract. Text Message as a Legal Contract
Rent Control Update by Scott Safadi of Cal Bay Property Management:
Rent control measures were defeated in both San Mateo and Burlingame, but with widespread support, the rent control measure passed in Mountain View. Effective immediately, rents in Mountain View cannot be increased more than the current CPI index, with a floor of 2% and a ceiling of 5%. This means that we can expect rent increase maximums in Mountain View to hover between 2-3% indefinitely.
What does a strict rent control policy really mean for renters and landlords? For renters, it means stability. Renters will be able to count on their living expenses remaining fairly steady. For landlords, the horizon is considerably more bleak. The issues for landlords appear after a down cycle in the rental market. When rents fall dramatically, like they did in 2002 and again in 2009, the challenge is getting rents back up afterwards. Rents fell as much as 50-60% in 2009. So, if you were renting a 1BR in Sunnyvale for $1,500 in 2001, in 2003, you were getting $1,000. At 2%/year, your rents would have risen to $1,148 by the time the next downturn took place in 2009. With the natural economic cycle we experience in capitalist America, rents in rent controlled cities will forever be depressed following the first big drop in rents that takes place after the enaction of rent control. Landlords will not again have an incentive to modernize and upgrade their buildings. This will be especially damaging when considering that the bulk of apartment stock in the Bay Area was built in the 1960’s. Cities should be wanting landlords to be able to upgrade & modernize buildings. Landlords will have no incentive to do so under some of these new rent control policies.
Scott Safadi of Cal Bay Property Management has witnessed a resurgence in bed bug infestation over the past several weeks. Decades after their apparent eradication, bed bugs have made a dramatic return to our world. There are two types of treatments for bed bugs. One involves extreme heat, while the other is a chemical treatment. Many people are afraid of being exposed to the chemicals associated with bed bug treatments. Pest control is a heavily regulated industry. The chemicals have to be safe enough for the technicians to handle on a daily basis. It is highly unlikely that isolated exposure from having your home or apartment treated would have any effects whatsoever on health. Heat treatments do not come without problems. The extreme heat can damage the contents of a home, including televisions, appliances, etc. There is no easy answer to beg bugs. However, the most important thing is proper preparation if your unit is going to be treated. Scott Safadi and Cal Bay Property Management hope that bed bugs crawl back into the hole from where they came and never come back this time.
Scott Safadi of Cal Bay Property Management has been witnessing a softening in the Bay Area rental market throughout the course of 2016. This softening was inevitable given the astronomical rent increases that we have seen over the past five years. Scott Safadi does not believe that it is a matter of hitting a price ceiling. Rather, it’s an indicator of a slowing in job growth, specifically in the high paying tech sector. Housing prices continue to rise and are at levels where most renters do not have the luxury to decide whether to purchase or continue to rent. 10% or 20% down is simply unrealistic for most, so renting continues to be a strong option. Read the article below for some more data.
Traditionally, landlords have always tried to get 12 month leases. Typically, if a shorter lease length is offered, the monthly rent rate goes up. Scott Safadi believes that this does not always have to be the case. It is often in the landlords interest to create a shorter-term lease. For example, a landlord never wants a tenant to move out during the months of November and December because so few people move during those months that it is very hard to fill a vacancy.
That being said, if put in a position to sign a new lease commencing December 1, Scott Safadi would advise offering either a seven or eight month lease at the same rate as the 12 month lease option. Tenants will often take this option to increase their flexibility and provides the landlord with an option to offer that tenant a new 12 month lease the following summer or to raise the rent at that time if the rent that was achieved in December was below-market due to the seasonal slowness.
The rental market in Silicon Valley is finally softening after 5 straight years of dramatic growth. In the past 45 days, rents have declined as much as 15% in some markets. This correction may represent the stabilization of the market, which could not have sustained double digit annual growth indefinitely.