Property Management Blog

How to Establish a Great Relationship with Your Torrance Tenants

Pinnacle Property Management - Friday, October 11, 2019

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Rental properties come with great monthly income, but being a landlord also comes with a lot of stress and responsibilities.

As a landlord, it is easy to start seeing your tenants purely as an income source, but you also need to build a healthy relationship with them. Connecting well with your tenants and being a great landlord has many rewarding benefits, including smoother tenancy and low tenant turnover.

Being a great landlord doesn’t have to be complicated: it is all about common courtesy, kindness, and good manners.

In this article, we will cover tips on how to be a great landlord in Torrance, California. 


Tip #1: Thorough tenant screening

Before accepting a tenant for your Torrance property, it is critical to perform an advanced tenant screening.

Who are quality tenants?

They are renters that pay rent on time, do not damage your property, and do not create expensive legal problems.

When screening tenants, look at factors like their credit and rental history. You also need to check their income stability to establish whether the tenant is able to pay rent on time and will be responsible in your property.


Tip #2: Be a responsible landlord

Being a landlord does not mean that you just sit back and relax while waiting for the rent check to arrive. It requires a lot of hard work, including marketing, bookkeeping, property maintenance, and strict adherence to Torrance landlord-tenant laws.

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It’s for this reason, that landlords consider hiring a professional property management company to take on many of the responsibilities for them.


Tip #3: Customize the lease

For a tenant to rent your property, they must sign a lease. A lease is a legally binding document that outlines the rules and regulations you and your tenant must follow during the course of the tenancy. Standard terms that should be indicated in the agreement are the security deposit, the rent, property maintenance, and lease termination.

You can also customize the lease to include any special policies you may have, such as allowing pets and rules on property modifications. 

A detailed lease will help you minimize conflicts with your tenant. Consider hiring the services of a good property management company if you need help drafting one.


Tip #4: Charge the right rent

Did you know that the right rent will attract the best, most qualified number of prospective tenants? 

This means that it is important to always start by charging the right rent, which translates to a stable income and low turnover costs.

It is advisable to research the marketplace and assess rental amounts for properties like yours. You may also want to hire a competent property management company in Torrance to help you.


Tip #5: Know the laws

As a landlord, it pays to know that each state has landlord-tenant laws that cover things like security deposits, rent, tenant rights, and evictions. It is in your best interest to understand that these laws can help prevent potential issues with tenants in the future that could possibly cost you a lot of time, effort, and money.

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For example, under the Torrance landlord-tenant laws, you must provide your tenant with 24 hours’ notice before entering the premises. Failure to do this could result in your tenant suing you for harassment.


Tip #6: Keep the lines of communication open

The key to a successful tenancy is communicating with your Torrance tenants. The security they will feel in knowing they can easily reach their landlord to deal with any issues will help them feel comfortable being your tenant. 

Define your communication channels and times you are most frequently available and let them know how you will respond. Managing your rental will be much easier when you stay in touch with your tenants.


Tip #7: Listen to the tenants’ concerns

Listen to your tenants’ feedback and complaints. This is essential if you want to enjoy long term tenancies and be a great landlord. When you communicate with them, listen attentively, and do your best to resolve issues, they will feel valued and appreciated.


Tip #8: Align with the Fair Housing Rules

As a landlord, you need to be aware of the Fair Housing Act that prohibits discriminatory practices in housing. This states that you should never discriminate against tenants based on certain protected classes: familial status, disability, national origin, sex, religion, color, and race.

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Be careful about what you write or say, whether on your lease, advertising, in person, on the phone, or anywhere else in your business. The last thing you want as a landlord is to be fighting a tenant discrimination lawsuit in court.


Tip #9: Take care of those repairs 

One of your responsibilities as a landlord is to keep your rental property in good condition. When a tenant calls with repair requests, make sure you respond as quickly as possible. Take note that you will also need to give your tenant adequate notice before entering the property. Most laws require landlords to give their tenants at least 24 hours prior to entering rental premises.

The tenant may choose to withhold the rent or exercise the right to “repair and deduct” if you fail to repair the issues on time. The tenant may not consider renewing their lease for another term if this becomes an ongoing issue.


The Bottom Line

Being a landlord in Torrance, California can be challenging and demanding. It is a job that requires you to provide exceptional customer service and spend time building a good relationship with your tenants. 

Nevertheless, by following these nine tips, you’ll be able to establish a great relationship with your Torrance tenants. Your renters may end up staying and extending their lease as a result, making your experience as a landlord more stress-free and profitable.


5 Easy Ways to Get More Rent for Your Torrance Home

Pinnacle Property Management - Friday, September 13, 2019

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As a property owner in Torrance, one of your goals is to get more rent for your investment.

Let’s take a look at some ways to raise the rent.

One simple approach is to ask for more rent. Nonetheless, every rent adjustment demands a solid reason. For example, adding extra value to the property before a new tenant moves in enables you to set the rent based on these improvements.

Many landlords assume that adding value to the property requires expensive or time-consuming developments. While some updates certainly command a premium, there are also some cost-effective ways to get more rent for your home. Sometimes boosting the value takes a modest time investment and less than $500. 

From applying a fresh coat of interior paint to boosting the curb appeal, there are many simple solutions available. In this article, you'll learn about five easy methods that allow you to increase the rent on your Torrance home.


#1: Improve the curb appeal

Boosting the curb appeal is one of the simplest ways to raise your property’s value. You can update the curb appeal by carrying out regular landscaping duties:

  • Fertilize and water the plants and trees to encourage growth
  • Regularly trim and prune the greenery to keep it tidy
  • Frequently cut the grass to maintain a nice length

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Driveways play a large part in curb appeal but often get overlooked. Check for any cracks or other issues with the driveway. A driveway commonly acquires oil spots that need cleaning on a regular basis.

Another important step concerns the home exterior. Cleaning procedures depend on the particular building materials. For example, brick houses need pressure washing to nicely bring out the color. Any cracks and chipped areas will need further attention and repair.

In the case of a wooden exterior, check how the paint is holding up. Too much flaking or chipping means it’s time for a fresh coat of paint. The updated result can work wonders on the property’s perceived value.


#2: Opt for professional cleaning

End-of-tenancy cleaning gets your property ready for showings. The best approach is to pay for a professional cleaning service to ensure even the easy-to-miss areas get a thorough scrubbing. Make sure to pick a reputable company that has good reviews.

Sometimes you may face the challenge of lingering smells that haven’t cleared after the cleaning. Baking soda absorbs smells, so you can put some in an open tray and leave it for a few days in places that have a strong smell. Avoid spraying any synthetic or even natural fragrances; some people are sensitive to strong scents or may be put off by a specific one.

People are especially observant of cleanliness in bathrooms. It is important to get rid of any rust rings, hard-water deposits, and soap scum. Also, make sure there’s no mildew growth around the shower cabin or a bathtub.


#3: Invest in new appliances

Provide better amenities and you’ll see that people are willing to pay more rent. A brand-new washing machine adds more value to the home than a washer that sounds like a jet engine.

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Adding quality appliances is one of the basic ways to upgrade your amenities. For example, new kitchen appliances come with useful features that make life much easier. Your tenants will find the whole property more attractive when seeing the latest gadgets installed.

Upgraded amenities also add value. They are more energy-efficient than their older counterparts and as a result, your tenants will cut their energy use.


#4: Repaint the surfaces

Applying fresh paint is a simple yet highly effective way to raise the rent. Chipped, cracked, and worn paint lowers the property’s value. You might have state-of-the-art appliances and great landscaping work done around the home, but an expired paint job still demands lower rent.

When you plan the paint job, check for painted surfaces both inside and outside the property. Inside the home, it’s best to use only neutral colors in order to appeal to the widest selection of potential tenants.

Exterior colors are at their best when they complement the surroundings and blend in without being dull. Pick colors that are inviting and make you instantly feel comfortable when viewing the building from a distance.

When you notice that the painted surfaces are free of any marks, chips, and scuffs, applying new paint won’t necessarily increase the home’s value.


#5: Increase the rent incrementally

So far, we have covered tips that work best for updating the property between tenants. Incremental rent raising is a smart approach when you wish to increase the rent while your tenants still occupy the property.

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Forgetting to add the incremental rent increase capacity in the rental agreement is a common issue. When landlords have long-term tenants, the charged rent may start falling out of sync with market rates. A sudden rent increase to reflect market conditions could create resentment or even result in tenants leaving.

For this reason, adding the rent raise policy into the agreement is a savvy way to keep the rent competitive.


The bottom line: get more rent for your Torrance home

Raising the rent helps to make the most out of your Torrance investment. In most situations, you’ll have to put in a little bit of time and money to justify the higher price.

The easiest approaches? 

Invest in better amenities, such as new kitchen and bathroom appliances. Give the home’s worn interior and exterior a paint job to boost its perceived value. Finally, consider the changing nature of rental market rates and incorporate a rent raise policy into the rental agreement to allow for incremental rent growth.

If any of this seems daunting to you, consider hiring a professional property management company to help guide you through the process.

What Exactly is “Normal Wear and Tear”?

Pinnacle Property Management - Tuesday, July 23, 2019

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Most if not all landlords collect security deposits upon signing the lease agreement to ensure that tenants leave the property in the same condition as it was when they moved in. A security deposit is collected when a new tenant moves in to cover the repairs that are considered to be beyond "normal wear and tear".

What exactly is “normal wear and tear”? 

How is it different from damage? 

Many tenants and landlords have the same questions when it comes to making deductions from the tenant's security deposit. They have their own definition of what it is and it often leads to disagreements and conflict.

As a result, the definition should be clearly defined in the lease agreement. There should be no room for assumptions as they can result in conflict between you and your tenant.


What Is Normal Wear and Tear?

Generally, there are two types. The first one is caused by reasonable use and the other type is the above reasonable use caused by the tenant.

How does this apply to the maintenance of your Torrance, California property?

For example, a hole in the kitchen wall is not considered to be normal wear and tear. Nor are broken windows.

The tenant cannot be charged for the following normal wear and tear:

  • Paint fading or chipping from furniture being pushed against it or small holes or marks on the walls - It is normal for tenants to have their furniture against the walls.

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  • Faded or worn-out carpeting or flooring or showing a trail from the paths - It is normal for the carpet to wear out after constant use. This is also true for scuffed up wood floors.
  • Plumbing starting to drip or leak or fittings and washers wearing out - It is normal for things to leak occasionally as well as to have dirty grout or tiles. However, a stain on the ceiling from an overflowed bath is not normal wear and tear.
  • Older appliances and fixtures wearing out or breaking down - Every appliance or item has a lifespan and it is normal for these to eventually stop working or break.

However, the following scenarios are not considered normal damage, and the tenant's security deposit will be used to fix them:

  • Scribbles, drawings, and scratches all over the walls
  • Ripped or marked-up wallpaper
  • Badly scratched or gouged floors
  • Wine stains on the carpet, iron burns on hardwood, and broken tiles 
  • Cracked toilet tanks or broken toilet seats
  • Doors or windows coming off their hinges or are broken
  • Stain on the ceiling from an overflowed bath
  • Broken or missing handles or locks
  • Urine or pet odor throughout the property

These instances are damages that are the tenants' fault. 

Normal wear and tear is deterioration that occurs based upon the use for which the item is intended. Furthermore, negligence, carelessness, accidents, abuse, or intentional damage to the premises or equipment is not.


When Is It Considered Damage?

When something is considering damaged, disagreements often occur between the landlord and tenant.

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Before signing the lease, both the landlord and the tenant should inspect the property. They should both pay close attention to the section in the lease agreement talking about the return of the security deposit and be in agreement with it before it is signed.


Returning the Security Deposit

Determining whether or not to return the security deposit to the tenant at the end of a lease can be difficult because it is left for interpretation.

Disputes can be minimized, however. The landlord needs to give valid reasons why the damage is not considered normal wear and tear. 

This is where a solid lease agreement will come in handy. It would clearly outline the differences between normal wear and tear and accidental or intentional damages. It would also indicate the state of the property when the tenant moved in to compare it to when he or she moved out.



Experienced landlords in Torrance, California know the importance of setting expectations on how their property should be returned and how tenants can expect to get their security deposit refunded to them. It avoids potential misunderstandings and arguments between you and your tenants, keeping the relationship strong.

8 Things to Know About the Fair Housing Act

Pinnacle Property Management - Friday, July 5, 2019

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The Fair Housing Act gives every American the right to equal and fair treatment in regards to housing. However, in some cases, there are some landlords that are not aware that this law exists.

Due to the lack of information and experience, a property owner can find themselves in court fighting discrimination a lawsuit.

That is why we will discuss the Fair Housing Act in this article. It will cover 8 things that every investment rental owner should know about this law.


1. What's the Federal Fair Housing Act?

The main objective of the FHA is to fight discrimination in the selling, buying, and renting of homes. It was passed to prevent sellers and landlords from discriminating against certain classes of people.

Essentially, the Act ensures that every American citizen is treated equally and fairly in any activity that is related to housing regardless of their class. Such activities include:

  • Renting 
  • Home selling 
  • Getting a home loan


2. When was the law enacted? 

The Fair Housing Act was enacted in 1968, a week after the assassination of Martin Luther King Jr. Historically, discrimination in housing was commonplace.

In 1968, the demand for fair and equal treatment in housing was officially passed as a law.






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The series of events that preceded its enactment include the 1964 Civil Rights Act, the 1963 Rumford Fair Housing Act, and the 1960s Civil Rights Movement. 


3. What government body enforces the FHA law? 

The federal executive department with statutory authority to administer and enforce the Fair Housing Act is the United States Department of Housing and Urban Development (HUD). 

HUD enforces the law by using two methods:

A) HUD uses “testers”. The testers are people who pose as tenants or home buyers. Their goal is to test whether or not they will be treated fairly and equally by landlords or home sellers. 

Home sellers and landlords should be cautious and follow the law at all times for this reason.

Examples of discriminatory statements by landlords when advertising their rental units include:

  • Great for working folks or students
  • Suits mature individuals or couples
  • Perfect for female students
  • Suitable for single professionals
  • Ideal for quiet couples

Other rather openly discriminative statements include: “seeking mature couple,” “must have working income,” and “adult building” or “not suitable for children.” 

B) The other way HUD enforces the Fair Housing Act is through investigating discriminatory claims. Any home buyer or renter that has reasons to believe they have been discriminated against can file a discrimination claim. 

Once a discrimination file has been filed, the next course of action for HUD would be to dispatch a team and conduct investigations immediately. 


4. What are the goals of the FHA? 

The Fair Housing law focusses on 3 main facets of housing: renting, selling, and mortgage. 

Which examples of housing discrimination does this Act protect people from? 

The following are some of them:

  • Interfering or threatening someone’s Fair Housing rights
  • Using statements that are deemed discriminatory or being biased against a protected class in any form of advertising
  • Setting different rules for acquiring a mortgage loan
  • Lying about the availability of a housing unit

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  • Withholding crucial information about a home loan from a person of a protected class
  • Performing discriminatory practices during property appraising
  • Providing different housing accommodations and amenities for different tenants
  • Blockbusting (convincing a property owner to sell their property under false pretense)
  • Refusing to rent, sell, or negotiate for housing


5. Which classes of people do the Fair Housing Act protect? 

Originally, the Fair Housing Act protected four classes of people: religion, national origin, race, and color. Later, the list was expanded to include three more classes: sex, familial status, and disability. 

In 2017 we saw the inclusion of two more classes. A judge ruled that gender identity and sexual orientation are protected classes as well. This means that there are 9 protected classes now:

  • National origin
  • Religion
  • Race
  • Color
  • Sex
  • Familial status
  • Disability 
  • Gender identity
  • Sexual orientation


6. Does the Fair Housing Act exempt any groups? 

Yes, the FHA exempts certain groups from its provisions. Such groups include:

  • An owner-occupied home with less than four rentable units
  • Single-family homes rented or sold without using a broker
  • Members-only organizations or private clubs


7. Why do some states have other protected classes not mentioned here? 

At the federal level, there are 7 (and just recently 9) protected classes. Since the law came to be in 1968, individual states have also passed legislation to include even more classes.

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Florida, for example, has additional classes such as:

  • Sickle cell trait
  • AIDS/HIV
  • Marital status
  • Age
  • Genetic information
  • Citizenship status


8. What’s the penalty for breaching the FHA? 

Regardless of whether the violation is intentional or not, there are multiple penalties you may face. These penalties vary subject to the nature and severity of the violation committed. 

If the violation is subtle, then it’ll usually attract imprisonment of less than a year or a fine of a few thousand dollars. In case the violation involved threats or bodily harm, then there shall be a large fine and/or imprisonment of up to ten years.

In case of sexual abuse, kidnapping, or even killing, the penalty may include a large fine and long-term imprisonment.



These are 8 aspects of the Fair Housing Act that every home seller or landlord in California should know about. This information is only meant to be the basics of the Act. If you want more help, consider hiring the services of a professional.

Best Questions to Ask a Property Manager Before Hiring

Pinnacle Property Management - Wednesday, June 12, 2019

Letting a professional manage your Torrance, California rental property is a great step towards running a successful rental business. 

The right property manager understands the ins and outs of the local rental business. He has potentially managed dozens if not hundreds of other rental properties. As such, the manager will be better placed to advice you on the strategies that work. 

For example, he can help advise you on what rental marketing methods will work for your property. As a result, this can help save you both time and money. 

There is one major challenge when it comes to hiring a property manager. As with other professionals, not all property managers are created equal. Some are there to help you succeed while some are there to make money off of you. 

How do you find the best property manager for your Torrance rental property? 

It’s actually quite simple. You need to have questions ready for the interviews. Even without any experience managing properties, these can help you determine whether or not the individual is a good fit as the property manager.


1. What services do you offer property owners? 

Pick a property manager who can handle a variety of services. Good examples of such services include property marketing, tenant screening, property repair and maintenance, and evictions

If the property manager is only willing to handle one or two of these services, he may not be a good fit. You would be better off continuing your search. 


2. Are you managing any property right now? 

If the property manager isn’t managing any property, walk away. That’s a red flag. It may mean two things. One, the property manager has lost business due to poor services. Or two, he or she is just starting out in the property management business.

If the property manager is managing some properties, find some more information about that. The goal would be to find out just how many properties they are managing. If they are managing too many properties, you risk getting lost in the shuffle.

If they are managing too few properties, it may indicate they are just starting out. 

You should ideally look for a property manager with a portfolio of between 200 and 600 units. 


3. Do you have experience managing rental properties? 

Don’t get tricked by how well designed their website is or how great their office looks. Looks can be deceiving! 

Choose a property manager that has a wealth of experience based on two important things. One, the years they have been in the Torrance rental business, and two, how many properties they have managed. 


4. Do you know how to set the rent amount? 

If you have been in the landlording business for a while, then you understand how important charging the appropriate rent amount is. It attracts the right type of tenant and vice versa.

If a property manager doesn’t know how to set the rent amount, it’s a sign of trouble. Continue your search.

If they say they do, ask them how they go about it. If they don’t mention anything to do with ‘comparative market analysis’, walk away. 


5. Have you made any investments in the Torrance real estate market yourselves? 

Ideally, look for a property manager that has done so. They will most likely know the challenges of running a rental business there and how to overcome them. 

However, if they haven’t invested themselves, chances are that they lack the core experience to help you succeed.


6. Is your management agreement inescapable? 

As with any other business out there, there are some property management companies that employ rogue business practices. That’s why it always pays to read and fully understand any contractual agreement prior to signing it.

Understand the length of the contractual term, terms of the renewal of the agreement, and what happens should any party severe the contract.


7. How do you price your property management services? 

There are generally two pricing options when it comes to property management. There is the flat rate option and the percentage option.

With the former option, it means that you’ll have to pay the property management company regardless of whether your property is occupied or not. So ask yourself – will the property manager have any motivation to find a tenant for your rental property? 

In most cases, most likely not. Why should they bother themselves when they can just sit back and relax and still get paid? 

The second option is the percentage of collected rent. With this one, it means that the property manager receives a percentage of collected rent. This is usually about 10%. So with a rental income of, say, $3,000 per month, you can expect to pay your property manager about $300. 

The latter option is usually the most preferred by many property owners in Torrance. This is because it motivates property managers to ensure the property is occupied at all times. In other words, they don’t get paid if there is no tenant. 


8. Are there any miscellaneous fees? 

If the company is charging a very low monthly fee, think again. Remember, your property manager is there to make money. 

If he’s not making it via the monthly fee, odds are that he’ll try to make it by charging lots of miscellaneous fees. 


9. Will you carry out property repair and maintenance? 

Buying a rental property is obviously a huge financial undertaking. As such, it only makes sense to hire a property manager who can regularly inspect it for damage



There you have it. Best questions to ask a property manager before hiring. 

Remember to only choose the one that meets all or most of your expectations.

A Guide on How to Find a Profitable Property Investment

Pinnacle Property Management - Tuesday, May 14, 2019

Finding rental properties with superior earning potential is one of the keys to be a successful landlord. A profitable rental property will cover the mortgage, property taxes, insurance, repair expenses as well as provide you with returns on your investment. 

That might sound like a tall order, but many property investors enjoy the benefits of their passive income thanks to having made the right selection in their investment property.

To be part of that group, keep on reading to know what the right steps are to take to find a profitable property in Torrance, CA. 

Here are a few to get you started on your investment journey to success. 


1. Look for a reputable real estate broker. 

If this is your first time purchasing a property or you simply lack the time (or patience) to deal with all the paperwork and searching yourself, then consider hiring a real estate agent or broker. 

The right hire can mean the difference between success and failure in your quest to find the right rental property for your needs. 

A good agent should know the area like the back of their hand. They can also tell you which property will meet your investment goals and budget. This is especially important if you are considering an out-of-state investment. 

Not all real estate agents are created equal, though. You should always do your research and a bit of a digital background check prior to hiring one. 


2. Go through your finances thoroughly. 

A real estate investment is a huge financial undertaking. It will require you to go through your finances and see whether they are in order or not. 

In particular, check your credit report. Does it contain any inaccuracies? 

Ideally, you should get copies of this report from all the three major credit reference bureaus – Equifax, Experian, and TransUnion. 

A good credit report can help you gain credit lines, better mortgage rates or even insurance. 


3. Don’t overpay your investment. 

Overpaying occurs when you pay an amount for a property that negates or significantly diminishes its actual value. 

It hurts your investment since there will be not much room for growth, limiting your earnings from the investment. 

So, when looking to buy a property, set for yourself a maximum amount that you can afford to spend, leaving you with some cushion should there be vacancies. 


4. Consider buying a rent-ready property. 

A rent-ready property may be a bit more expensive. On the bright side, it’ll be ready for occupation the moment you buy it. 

You might even find yourself collecting rent at the end of the first month. 

Some buyers, however, often make the mistake of buying a fixer upper. In many cases, the price is often the main attraction. 

But sooner or later, what seemed like a great deal may end up being a costly mistake if you lack the experience or the time to see the renovations and/or maintenance repairs through. 


5. Get your Torrance property inspected. 

Don’t make the mistake of buying a property without having it inspected. It can be a costly mistake. 

A good inspector can find any hidden issues that could end up costing you in the short and long term. 

A good inspector will make sure that the environment is safe for tenants, that the paint is not lead-based, and that the electrical wiring is up to code. 

While you may need to foot the inspection bill, it can certainly save you lots of money down the road in unexpected repairs. 


6. Know the neighborhood. 

Now that you have found a property that meets your conditions, the next step is to research the neighborhood. Remember, location is everything when it comes to your real estate investment. 

It can make the difference between a property that is struggling and one that is flourishing. 

What you should you check in a neighborhood?

The first thing you want to look at is the vacancy rate. Are there many vacant homes in the area? If there are, chances are yours will be, too. 

Another thing you want to look at is the crime rate. No one wants to live in a crime prone area. 

You also want to look out for the quality of schools in the area. For tenants with school-aged children, the school district is a major priority


7. Follow the 1% Rule. 

The 1% rule states that a rental property should rent for at least 1% of the purchase price to yield a positive cash flow. 

For example, a $200,000 house would need to rent for $2,000 per month to be profitable. 

If a property meets this rule, it means that it’ll take 100 months for the property to recoup its cost. That’s 8.3 years. 


8. Don’t forget about curb appeal.

Tenants don’t want to live somewhere they would be embarrassed to bring friends and family to, just like you wouldn’t want to live in an unattractive home. 


Prospective tenants may not even want to apply to occupy your property based on how it looks from the outside or in pictures. 

While it might seem trivial, decorative touches like painting your home or updating your landscaping can be the difference between an occupied or vacant rental unit. 


9. Look at the insurance rates. 

As important as they are, insurance rates cut into your profits. 

Make sure to stay away from properties with extra high rates if possible. A property located in a flood zone, for example, may require you to carry extra flood insurance. 

If possible, buy a property that doesn’t require extra insurance. If you’re not sure whether an extra insurance is mandatory or not, simply call your insurance representative. 


10. Invest in a neighborhood with job opportunities. 

The other indicator of a profitable investment property is the rate of job growth. The reasoning behind this is simple: people tend to follow jobs. 

Job board websites and local business news can help you in your research. 


These are the 10 crucial things that you should consider when looking to find a profitable rental property in Torrance, CA. 

Again, if you simply don’t have the time or lack the industry experience, then consider hiring professional help. 

Problems Commonly Found in Property Inspections

Pinnacle Property Management - Thursday, April 11, 2019

Buying a rental property is a serious transaction with significant financial responsibility.  

That’s why before signing on the dotted lines, it makes sense to do all you can to get the best possible deal.   

So, how do you make sure you get the most value for your money? Well, for starters, have the property inspected by a professional. With a thorough property inspection, you’ll know the house or buildings true conditions.   

The last thing you’d want is to find out that your newly purchased real estate property has serious structural issues. That just means you’ll have to invest in extensive repairs. 

So, once you’ve found the perfect place, have it evaluated by a qualified home inspector. 

It’s also a good idea, as a buyer, to have a general understanding of what you should look out for when rental property hunting. This doesn’t require any expertise, only keen observation. 


9 Problems Commonly Found During Property Inspections


1. Water Leaks

This is perhaps the most common problem encountered during many home inspections in Torrance, California. Water leakages can be caused by many things. Most common sources include:

  • Loose supply line connectors. In most cases, this occurs due to a certain movement. For example, your washing machine hose can develop a leak due to the shaking during the spin cycle. When walking around, keep an eye out for watermarks around the washing machine area.
  • Intruding tree roots. Most water leaks occur outside a home. Where the tree roots are able to penetrate beneath the residence and interfere with the water pipes. Signs to look out for include wet patches, sinkholes or trees growing close to the house. 
  • Excess water pressure. Most pipes and faucets are only built to withstand a certain degree of pressure. Any additional pressure above the threshold can cause leaks. You can get a small sense of the pressure by testing out the various faucets throughout the property.  
  • Clogged lines. Clogged gutters, for instance, can cause water to overflow and lead to serious water damage. 

Leaks can waste water, damage your home, and encourage unwanted organic growth. 


2. Faulty Electrical Wiring

The most significant danger of faulty wiring is fire. When electrical wires are cracked, frayed, loose, or overheated, they become unable to properly conduct electricity. This usually causes a fire to break out. 

So, when checking your potential Torrance, CA home, be in the lookout for the following signs of electrical problems. 

  • Improper grounding
  • GFCI outlets missing or faulty
  • Bad electrical outlets
  • Inadequate power
  • Old or damaged electrical panel

A professional property inspector will be able to tell if there is faulty wiring inside the panel. 

home-inspection-faulty-wires


3. Poor Drainage and Land Grading

Without the right slope (grade) around the property, many problems can occur. You may find leaks in the basement and the ground near the foundation may feel spongy. 

Over time, the home’s foundation may start experiencing issues. The excess water may cause the ground to move beneath the structure. This can consequently impact the foundation and cause cracks in its structure. 

Besides potential foundation damage, poor drainage may also lead to rot and mold.

Signs of improper land grading include:

  • Floors that visibly slope to one side or the other
  • Interior doors that visibly swing to one side or the other, when left ajar
  • Interior doors with large, uneven gaps at the top, when closed
  • Windows that look off-kilter


4. Roof Damage

Fixing a damaged roof can be among the list of costlier home maintenance expenses. Roof damage can cause water leaks, decrease your home’s value and even cause a home to collapse. So, when looking for a rental property to buy, always observe the roof. 

Roof issues that are commonly found in property inspections include:

  • A sagging roof deck
  • Staining on interior ceilings or walls
  • Blistering or peeling exterior paint
  • Wear and tear around roof objects and openings
  • Shingles that are curled, cracked, or absent

roof-shingles-repair


5. Foundation Issues

While often overlooked, the foundation of a home is an important structural component. It provides strength and integrity to the rest of the building. Therefore, without a strong foundation, you’re bound to have structural issues.  

When at a property viewing, be on the lookout for:

  • Separation of counters and cabinets from the wall
  • Floors being out of level or sagging, bowing or dipping
  • Gaps around window frames or exterior doors
  • Sticky doors and windows
  • The slab foundation appearing to have moved upwards
  • The house appearing to be sinking or having settlement issues
  • Cracks on the foundation, wall and/or floors

If you notice any of these things, it’s likely the building is experiencing foundation problems. That said, not all foundation problems are a deal breaker. Some can be simple to fix. 


6. Poor Overall Upkeep and Maintenance

When maintenance issues are deferred, the costs to bring the home back to its former glory can be high. Some telltale signs that the home has had poor overall upkeep and maintenance include:

  • Stained decks
  • Cracked paint
  • Worn carpeting
  • Loose caulk


7. Heating System Problems

Related to the point above, proper maintenance of a home’s heating and cooling systems is crucial. That said, not many homeowners service their systems regularly or even as required. 

The lack of maintenance, unknown to them, can end up leaving serious damage to the system. And, as you probably know, fixing heating system problems can easily run the gamut. 


8. Exterior Issues

Exterior issues are also common problems that property inspectors in Torrance encounter. Good examples include poor fencing jobs, cracked driveways, and damp damage. 


9. Improper Ventilation

There are many benefits to having a good ventilation system. It’ll help remove dampness, and expel contaminants, germs, and nasty odors. 

Most ventilation problems typically involve bathroom vent fans. In some cases, though, kitchen vent hoods can also be the culprits. 

Poor installation of a bathroom fan, for instance, can lead to the accumulation of moisture in a property. Over time, this may encourage mold and mildew to grow, leading to the overall deterioration of the property’s condition. 


These are the main problems home inspectors often come across. Doing your due diligence about your potential new investment property can save you huge amounts of money down the road. 

Remember, though, not all home inspectors are created the same. As such, make sure you do your homework in this area as well.

Tax Benefits of Investing in California Real Estate

Pinnacle Property Management - Thursday, March 14, 2019

Tax benefits can help you to cut down on your rental expenses by thousands of dollars each year. 

How much do you know about the tax benefits that are available to you? 

If you’ve been searching for ways to maximize your rental income, you’re in the right place. 

This article will show you how by exploring the tax benefits related to your California real estate investment.

You may be wondering; what are my tax incentives in California? Keep on reading to learn more about the tax benefits you can use to maximize your rental income.


Common Real Estate Tax Benefits in California

It’s said that “a dollar saved, is a dollar earned.” And this concept greatly applies to California’s rental property taxes. 

Where to start?


1.   Tax Deductions

Tax deductions can be your biggest source of tax benefits. 

That’s because the government allows you to deduct all expenses you incur to maintain, sustain, manage, and repair your property. 

What are these expenses?

  • Depreciation

According to the IRS, rental properties have a productive lifespan of 27.5 years. That means that – to them – your property loses value each year.

They allow you to deduct a depreciation expense each year to cover your property’s exhaustion (wear and tear).

To calculate your depreciation expense, here’s the formula: 

Depreciation expense = Actual value of the property divided by 27.5 years.

For example: If you own a $200,000 rental property, your depreciation expense would be:

Annual depreciation expense = $200,000 / 27.5 = $7,273

Under these conditions, you’ll be allowed to deduct $7,273 depreciation expense from your gross taxable rental income each year.

Impressive, right?

  • Interest Payments

Interest payments can also be huge deductible expenses for you. This simply means that you can write-off your:

  • Mortgage interest payments.
  • Home improvement loan interests.
  • And even credit card interest on products and services used in your rental property.

Note that this only covers the interest payments and not your monthly loan repayments. 

  • Maintenance and Repairs Expenses

Provided that they are necessary, reasonable, and ordinary, you can also write-off maintenance and repair expenses. These expenses include cleaning costs, repainting, plumbing, and electrical repairs, broken window replacements, and so on. 

Basically, any maintenance and repair expense that maintains the value and state of your rental property counts as a deductible. 

  • Travel Expenses

Did you know that you are entitled to a tax deduction on all the travel expenses you incur for your rental activities? 

You are allowed to deduct your expenses whenever you travel to your rental property to:

  • Deal with tenant issues
  • Deliver supplies
  • Collect rent
  • Purchase a spare part for a rental repair task

Fuel, vehicle repairs during your travel, airline tickets, hotel accommodation, and meals if you stay overnight also count as travel expenses. 

You can deduct vehicle-related expenses as the actual expenses you incur (repairs, upkeep, and gasoline), or using the standard mileage rate as per the IRS. 

You can check their website for more information. 

However, you have to be very smart with how you deduct travel expenses. The IRS will need proof of these expenses.

Make sure you have sufficient and legitimate receipts/documents to back your travel expenses. 

  • Home Office Deductions

If you use a home office to manage the affairs of your rental property, all expenses you incur to maintain that office count as deductibles. 

This write-off applies regardless of whether you own the office property or are just renting it from another landlord. 

  • Insurance Premiums, Utilities, and Employee Salaries

The government allows you to deduct premiums you pay for insurance on your rental property. 

Fire, floods, theft, and landlord liability insurance all count as tax deductibles.

You can also deduct your property’s utility expenses and on-site employee salaries from your gross taxable rental income.

  • Professional and Legal Services

All expenses you incur to hire attorneys, accountants, real estate investment advisors, and property managers are deductibles.

However, these services and professionals must be there for rental-related activities such as:

  • Attorneys to help you with tenant eviction proceedings. 
  • Accountants to manage your property’s finances.
  • Property management companies to look after your rental property and so on.

As you can see, there are so many tax deductions you can benefit from to lower your tax obligations.


2.   1031 Exchange

As per Section 1031 of the Internal Revenue Code, you can swap your rental property for another with little to no tax obligations. 

The 1031 exchange allows property investors to pass on their capital gains from one property to another without having to worry about taxes. 

You have to meet a few conditions in order to qualify for this tax benefit. 

For example:

  • Both properties – the new and the old one – must be considered “like-kind.”
  • The new property’s value must be greater than - or equal to - the value of your old property.
  • Neither of the properties should have been held for personal use.
  • The new property must be used for productive business purposes only.


4.   Long-term Capital Gains

Long-term capital gains are the profits that you make from the sale of a property you’ve held for more than a year. 

How do you benefit from this tax-wise?

Unlike short-term capital gains (profits from the sale of properties owned for less than a year), long-term gains have lower tax obligations.

Think of it as a discount from the IRS. 

The longer you hold your rental property, the lower they’ll charge you in taxes when you decide to sell. 


There you have it. 

From the tax benefits above, it’s quite easy to see how you can cut down your tax obligations. 

In fact, if you employ smart tax strategies, you can end up saving thousands of dollars each year. Sounds amazing, right? Then you start applying these tips as soon as you can and keep track of all your expenses that can be deducted. 


Tips for Investing in Multi-Family Real Estate

Pinnacle Property Management - Sunday, February 3, 2019


Investing in a multi-family property can be an exciting opportunity with promising returns. It offers unique advantages that aren’t possible through a single family home investment.

But as with any other type of investment, it can be risky if you don’t know what you are doing. That’s why, in this article, you’ll learn 8 tried-and-proven tips on multi-family investing from the pros.


Tips on multi-family real estate investing


Tip #1: Choose your location wisely. 

Location, location, location – it’s the real estate mantra. Buying in high demand areas is undoubtedly the pathway to property investment success.

Your preferred location should be near establishments like hospitals and schools and be close to public transit. 

Once you’ve chosen where to buy a multifamily property, talk with the locals. This will help you to get a somewhat realistic take on the area’s pros and cons.

For instance, you might have read about a new community project. You can get to know what the locals think about it. Will it be good for the community? 


Tip #2: Set financial goals before buying.

Setting financial goals for your property investment may seem tedious. However, it’s crucial for your success. Aside from setting your goals, you should evaluate the multifamily unit. To start that off, you must choose which financial metric to use. There is an internal rate of return (IRR), cap rate, gross operating income (GOI) as well as many others. If you need help finding which metric is right for you, click here

Next, you’ll need to decide what is more important for you. Is it the current return or the property’s appreciation? Once you figure all these things, set a blueprint on how you are going to achieve them.


Tip #3: Know the area’s rental market. 

Before buying multi-family real estate, it’s in your best interest to know what the area’s rental market is like. The last thing you want is to invest in an area that prospective tenants find unappealing.

So, how are you supposed to determine whether your multi-family investment will be viable or not. Well, you need to do research on the area’s rental rates and average vacancy. This information existing in newspaper classified ads, online rental listings, or by visiting the community itself.


Tip #5: Determine the best rental price. 

Setting the right rent can be a bit of a Goldilocks Paradox. If you charge too much, you risk having little inquiries. If you charge too little, you risk leaving money on the table.

The right rent price is beneficial in a number of ways. Not only will it help attract the right tenants, but it’ll ensure that your rental business succeeds.

You should pay attention to the competition. Focus on multi-family rentals in the area that are similar to yours. From there, you can compare the units and their rental rates. Compare things like the square footage, updates, and surroundings.
 

 You can either do this yourself or hire a realtor to do it for you.


Tip #6: Screen all prospective tenants. 

Bad tenants miss payments, damage property, and can be downright miserable to deal with. To avoid tenant problems, you must screen all your prospects. 

Screening should begin the first moment you make contact. Whether it’s through a phone call, a text, or even via email.

Having a set of pre-screening questions prepared can help weed out bad tenants beforehand. For example, it’s good to find out if they own pets in case you have a “no pets” policy in the lease. Of course, service pets are allowed following the Fair Housing Act. 

Some of the questions you can ask prospective renters are: 

  • What’s your reason for moving?” - Look for reasons such as wanting more space and changing jobs.
  • “When do you intend to move in?” - If it’s very soon, it may be an indicator that the tenant isn’t responsible. Responsible renters usually start their search well in advance.
  • “How much is your monthly income?” – It is best if a renter is making at least three times the rent amount. For instance, if you charge $1,200 for rent, then look for renters making at least $3,600/month.
  • “How many people will be living with you?” - When it comes to the number of occupants, the lesser the number the better. Among other things, more people generally create more wear and tear.

Once you have shortlisted the number of applicants, the next step is to:

  • Perform a credit check. A renter with a good credit score shows they are responsible as regards to their finances.
  • Contact their previous landlords. This will help you get a real sense of the tenant. 
  • Contact the tenant’s employer. Verify whether the renter is employed where he or she claims to be employed.

Screening all prospective tenants will help ensure that your multi-family property gets the right occupants.


Tip #7: Make your multi-family property attractive to tenants. 

Ever wondered why some properties are rented within days and others sit vacant for weeks on end? More often than not, it all boils down to how desirable a property is. 

The more desirable it is, the less time it’ll take to get it rented. But, the less desirable it is, the longer it’ll sit vacant. It goes without saying that a vacant rental property generates no rental income. 

The following are some tips to help your multi-family real estate stand out:

  • Paint: A fresh coat of paint and your property’s appeal will instantly rise. 
  • Clean-up and repair: Imagine the standards that you have set for your own home. Good quality tenants will not settle for a less-than-superior property.
  • Curb appeal: If you want your rental property to stand out, you must focus on revamping its curb appeal. Some flowers are always a good idea. https://www.pinnaclepmc.com/blog/include-rental-agreement-torrance-california
  • Details: These are the little things that nobody thinks about – except your tenants! So, pay attention to things like your home’s décor, hardware, and furniture appliances.


Tip #8: Hire the right team.

Being a landlord is a team effort, especially when you have multiple tenants to manage. As such, you need to have the right team of real estate professionals if you are investing in multi-family homes. The team should include people that will help keep your property in top-notch condition, solve legal problems, secure reliable renters, and help balance books.


There you have it. Eight tips on multi-family real estate investing. Remember, having a successful multi-family property investment requires a lot of time, effort, experience, and knowledge. If you don’t have these, please consider hiring a property manager.

Tips When Buying Investment Property in Torrance, Ca

Pinnacle Property Management - Saturday, January 12, 2019

Buying an investment property can be a lucrative strategy for many people. It is for this reason that so many people are attracted to real estate investing.

You’ve probably heard “location, location, location,” when it comes to buying an investment property. As cliché as it may sound, choosing the right location can make the difference between a thriving rental business and a struggling one.

The city of Torrance, Ca has become one of the most desirable cities in the South Bay region of Los Angeles. In fact, the city has consistently been recognized as one of the safest communities in the greater Los Angeles area.

Aside from being tagged as safe, Torrance also offers good schools, a variety of parks, and a beach close-by. All these and more, make the city attractive for families to live in as well as a place for tourists to visit. And as more and more people move there, property investors see this as a good opportunity to invest in rental housing as well.

So, in today’s article, we are going to share with you some tips for buying an investment property in Torrance, Ca.


7 Tips When Buying Investment Property in Torrance, Ca


Tip #1: Look at the Metrics

When wondering what to study when investing in rental properties, consider its wealth potential. Things like demographics, population growth, historical growth trends, employment opportunities, and vacancy rates can help you with this.

You also want to lookout for red flags. For example, job cuts from a major employer in the community spell disaster for rentals.

Lastly, you want to predict the kind of tenants who may be searching for a home in that particular neighborhood. For instance, consider retirees, families, or young professionals. By doing this, you’ll have an idea on the type of home to invest in.

investment-property-calculator


Tip #2: Perform a Rent Survey

Basically, a rent survey helps ascertain competitive market rents in any particular location. The survey will help you decide how much rent you need to charge so that your property is cash-flow positive.

Determine what comparative properties in that neighborhood are charging for rent. Next, check to see whether the demand exists for the kind of properties you are considering investing in.


Tip #3: Inspect the Property

When looking to buy real estate, inspecting a property can help you decide whether it’s worth pursuing or not. Are the appliances in working order? Is the roof in good condition? Does the basement have a musty odor, or does it flood after a rain?

Additionally, you’ll also need to assess whether the plumbing is up to code and if the electrical system meets local building codes.

Unless you’re an expert, it pays to hire professionals to evaluate the home for you.

maintenance-repairs-rental-property


Tip #4: Judge Cash Flow Properly

“Cash flow” – and for good reason – is a term that comes up in most conversations on real estate investing. Cash flow can mean the life or death of your Torrance rental business.

But what is cash flow? Simply put, it’s the amount of money, cash and non-cash, moving into and out of your business. In this case, the rent is the money travelling into and property expenses are the monies travelling out of your rental business.

It goes without saying that for your rental business to be profitable, the rent amount needs to exceed your property expenses. Examples of property expenses include property management fees, repairs and maintenance, taxes, mortgage, and insurance. 


Tip #5: Assemble a Team of Real Estate Professionals

Being a landlord is a team effort. To be a successful one, you need to have a team of reliable professionals that will be there when you need them.

The team can include these professionals:

  • Property Manager: A qualified manager can manage tenants, handle maintenance, and pay the bills. In fact, if you hire the right one, he or she may be the only professional you’ll need.
  • General Contractor: You need someone who can handle maintenance and property emergencies when they occur in your property.
  • Property Inspector: You need someone who can alert you to structural problems and code violations that require attention.
  • Real Estate Agent: A real estate agent is familiar with the local market and can help you, among other things, set rent prices.
  • Real Estate Lawyer: Yes, legal issues may not crop up often. However, when they actually do, you’ll need someone to file the paperwork and represent you in court. 
  • Certified Public Accountant: A good accountant will help you keep your files in order and your tax return accurate.

real-estate-professionals


Tip #6: Have an Exit Strategy

Buying the right property at the right price in Torrance, Ca is key. Be that as it may, it’s only one part of investing. The other part is planning an exit strategy. As the name suggests, an exit strategy is a plan to remove yourself from an investment deal.

It goes without saying that implementing a sound investment strategy is crucial to success. It will result in minimal risks and maximized profits.

Popular real estate exit strategies include:

  • Lease Options
  • Seller Financing
  • Buy And Hold Real Estate
  • Flipping
  • Wholesaling

Sure, none of the strategies mentioned is right or wrong. Even so, the exit strategy you choose should depend on two important things. One, your level of experience, and two, the amount of cash you want to invest in the project. 


Tip #7: Establish Your Options

There is still a chance that your exit strategy may not work. Just when you were thinking of selling, the bottom might fall out of the Torrance real estate market. And, the local rental market might be flooded at the same time as well.

You’ll be glad you researched your exit strategies before purchasing the rental property. If you can’t get the desired cash flow and the property isn’t selling, you might offer a buyer a lease-purchase deal, for instance.

Or, you can opt for wholesaling and offload the property to another investor, albeit at a reduced market rate. Sure, the profit may be smaller. But this may enable you to cut your losses in monthly carrying costs.

how-to-buy-rental-property


Buying an investment property or investing in real estate rentals is in no way an exclusive matter. Any person can do it. But success is what’s exclusive. To be a successful real estate investor in Torrance, you need to learn the ropes of the business. Hopefully, this article has helped you in that regard.



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Pinnacle Property Management
CA BRE # 01905815
22700 Crenshaw Blvd.
Torrance, CA 90505
Ph: (310) 530-0606
Fax: (310) 626-9786
Email: pinnacle@pinnaclepmc.com

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