Did you know California has a 57.9% rate of home ownership according to the US Census Bureau? It sounds wonderful that nearly 60% of homes are owner-occupied, but this also means roughly 40% of homes are rentals. Does it shock you to think 4 out of 10 houses are occupied by tenants in California?
So far during “Blight Week” we’ve talked about the definition of blight, fences and mowing lawns, but let’s shift gears to talk about investment properties. Since real estate investors own a very significant chunk of the housing stock, it’s essential to have them on board for maintaining their properties so neighborhoods can grow in the right direction. Imagine how 40% of a neighborhood could influence a given area – for better or for worse. There are many investors out there who really get this, but there are also those who do little to nothing to adequately maintain their investments, which only brings down the neighborhood. Sacramento Real Estate Broker Joel Wright gives some insight and practical advice to investors:
I would just caution investors to realize if they are not going to work with the property and manage it effectively, then it will make them more money and save time and stress to hire a manager to do it for them. And if they are in a rundown neighborhood, or let their unit run down, they will get the kind of tenants that will feel comfortable living in that kind of unit, and that will lower the rent and increase the vacancy and maintenance which will dramatically lower their bottom line.
While we might like to believe purchasing real estate involves only what takes place inside of our parcel lines, there is no such thing as buying a “parcel island”. When we invest in real estate, we buy into a neighborhood and are therefore responsible for the image of the community. This is true for both owner-occupants and real estate investors. While it’s easy to blame blight on investors for not properly caring for their units, home owners, renters and local government (code enforcement) each play a major role in the image of a neighborhood.
Questions: How have you seen investment properties either harm or improve a neighborhood? How have you seen a lack of effective code enforcement damage a community? How would you suggest dealing with blighted investor-owned rentals in a neighborhood? If you are an investor, how do you maintain your own properties?