There’s a lot to consider when buying a condo, particularly the cost, as well as the structural and financial state of condo building. However, there are additional simple but practical things to ask before you buy.
1. Are there restrictions on pets?
Some condos have strict rules regarding pets, including bans on particular breeds, rules on the size of a pet, and restrictions on which common areas pets are allowed.
2. Can you barbecue on the deck?
You might think since this America you are free to grill year-round from the comfort of your own deck, but that’s not always the case. Some condo buildings don’t allow it, and some require any grilling to be done on a grill shared by the entire condo association, so you might be waiting for hours for someone to finish smoking a brisket, so you can grill a couple hot dogs.
3. Can you start a home business there?
Rules forbidding condos from being used as band practice spaces and metal-working shops seem pretty reasonable, but restrictions on home businesses could impact something as harmless as a private consulting business operated from home. If you’re planning to use your condo as a home office, you’ll want to be clear on the rules regarding what you can and can’t do there.
4. Are there limits on how long guests can stay?
Depending on your situation, rules limiting how long guests can stay could be a blessing or a curse. If you have a brother-in-law frequently getting kicked out of his house, it could be the perfect excuse to tell him to move along. On the other hand, if you have a friend hoping to visit for a couple weeks, such limits could really be a problem.
5. Is the building noisy or quiet?
If you’re typically in bed by 8 p.m. you might be thrilled about strict limits on when people can use the pool or play music, but if you’re someone who stays up late you might prefer a building with a more relaxed policy. And if you’re hoping to practice the electric guitar or your Gregorian chanting, you’ll want to review the condo building’s noise ordinance and possibly even drive by the condo building at night to check the scene. Various government agencies also map noise complaints, so you can tell if your building is particularly noisy or not.
6. Is smoking or vaping allowed?
If you are a smoker you’ll want to know whether you’ll be forced to stand across the street in the rain each time you feel like lighting up, or if you can’t stand the smell of it you’ll want to know whether smoke will be pouring in your open window each time your neighbor lights up on the porch.
7. Are tenants allowed to rent their units on Airbnb or VRBO?
Whether you’re hoping to make income on your condo when you’re out of town or you’re looking to avoid being neighbors with what’s functionally a hotel room, you’ll need to find out what the building’s policy is regarding renting a unit out.
8. Are there restrictions on posting flags or signs?
Whether you want to show some team spirit or advocate for saving the whales, you might discover that you are forbidden from expressing yourself because of condo rules. Some buildings don’t allow you to hang flags from your deck, or post political signs in your windows, or other similar forms of expression.
9. Where will your guests park?
Depending on the density of the neighborhood the building is in, and the number of available guest parking spots your building has, you may discover there’s nowhere for guests to park. If you’re hoping your car-dependent friends are going to visit your new home, it’s something to consider.
10. How noisy is your block?
Location is everything, especially when it comes to noise and unruly people. If your condo is near a sports stadium, concert venue, popular protest route, or hospital you may discover your new home is bursting with drunk revelers, angry chanting, and constant sirens.
Inventory has been declining in LA and around the country for several years. While there are many reasons for this (which I won’t get into here) the bottom line is that several economists are predicting this may slowly be coming to an end.
Why? If you didn’t know, the baby boomers are a particularly large demographic that will be downsizing in the not so distant future. Right now they are between the ages of 54-72 respectively and there are many of them. Not only are they high in numbers but they are also high in home ownership rates. Think about this fact: 39 million of 75 million homeowners were born before 1960 which is 52% of the total number**. That’s a lot of inventory coming on the market my friends.
Of course some will be passed down to children, and I know a few, most will be sold to help pay for living expenses and health care costs. As more and more of these homes come on the market over the next few years, inventory will surely lighten up.
Is it this year at the peak or next year? No one can answer but look for sunnier skies ahead.
- Crissi Avila
**Big Shifts Ahead by J Burns & C Porter
Rental prices in Los Angeles creeped up slightly in May, according to a new report from Apartment List.
The median price for a two-bedroom apartment is now $1,750—$10 higher than a month ago. The price of a one-bedroom hasn’t budged; it remains at $1,360.
Those numbers are based on census data and give a good sense of what renters in the city of Los Angeles are now paying. But what about the prices faced by newcomers to the city and those simply looking for a new place? CoStar provided a separate estimates based on the prices of LA apartments now listed for rent. According to the firm’s calculations, the cost of a two-bedroom is now $2,126 per month (up from $2,109 at the start of May); for a one-bedroom it’s $1,671 (up from $1,651).
Whichever estimate you use, prices appear to be rising—but at a fairly manageable rate. The cost of rent spiked dramatically in the last five years, as the nation’s economy recovered from the Great Recession. In 2018, rents aren’t rising nearly as quickly.
According to Apartment List, prices are up just 1.9 percent since last year. That’s below the average increase of 2.2 percent statewide. It’s also less than the minimum 3 percent rent hike permitted each year under the city’s rent control rules.
Why are prices starting to plateau? Last month, Richard Green, director of the Lusk Center for Real Estate at USC, speculated that new housing construction has increased the supply of apartments enough to better meet renter demand.
Rental prices may also have climbed so high that some LA residents are no longer willing or able to pay them. A recent report from the California Housing Partnership Corporation found that the 800,000 residents of Los Angeles County who earn less than half of the median income typically spend more than 70 percent of their income on housing. That leaves little left over for necessary expenses—let alone future rent hikes.
Photo: Rent control session panelists Helen Morales (left) and Nestor Otazo of Beverly Hills, Anna Ortega (center) of Los Angeles, Dan Costello of Santa Monica and Peter Noonan of West Hollywood
How do the rent control and stabilization laws compare in the four Westside cities that have rent stabilization ordinances? That was the topic of a luncheon panel held Friday in Santa Monica, sponsored by the Beverly Hills/Greater Los Angeles Association of Realtors (BH/GLAAR). If you are considering purchasing units, you need to be aware of the differences - read on!
Under rent stabilization rules, landlords are allowed to raise rents by a certain percentage each year, but the amount of that raise varies from city to city.
Peter Noonan, the housing manager for West Hollywood, told the Realtors the city’s annual rent adjustment for 2018 will likely be in area of 1.75%. The exact figure won’t be determined until the Consumer Price Index (CPI) numbers for May are released in mid-June and will be announced at the June 28 meeting of the city’s Rent Stabilization Commission. Last year’s increase was 1.75%.
In Los Angeles, the annual rent adjustment can range from a minimum of 3% to a maximum of 8% under the city’s rent stabilization ordinances. However, Anna Ortega, director of rent stabilization for the city of Los Angeles, said it has been decades since an 8% increase was allowed. In recent years, the annual adjustment has been 3%. She noted that if the Los Angeles didn’t have a 3% minimum in place, last year’s rent adjustment, based on the CPI calculation, would have been 2.52%.
In Santa Monica, the annual rent adjustment for 2018 is 2.9%, up from last year’s 2.75%. Dan Costello, the Santa Monica Rent Control Board’s public information officer, said they are considering a $60 cap for any of those increases.
Beverly Hills has two categories for rent-stabilized units – those which started with a rent under $600 and those which started above $600 – explained Nestor Otazo, the city’s code enforcement manager. At this point, only about 1.5% of Beverly Hills’s rent-controlled units are still in that first category where rents started under $600. Those units must be the primary residence for the tenants and must be occupied for a minimum of nine months per year. For those tenants, a 1.7% rent adjustment will be allowed in 2018. The overwhelming majority of Beverly Hills tenants fall into the second category. Prior to 2017, Beverly Hills allowed rents on those units to increase by 10% per year. However, following resident complaints, the City Council lowered the annual rent adjustment figure to 3% or the amount of the annual CPI, whichever is higher, said Helen Morales, the city’s deputy director of rent stabilization.
Unit Registry and Airbnb
While West Hollywood and Santa Monica have required building owners to register each rental unit with the city for decades, Beverly Hills and Los Angeles, have only just started such a registry.
In Los Angeles, an optional rental-unit registry was started in 2017, but it became mandatory in 2018. If an owner does not register, he or she does not receive a registration certificate and cannot legally rent any units.
Likewise, Beverly Hills also started its rental unit registry in 2017. “We wanted to collect information about the structures in the city,” said Otazo.
In all four cities, the unit registration can be done in person or online.
Vacation rentals such as Airbnb has been a hotly debated topic in recent years. West Hollywood recently banned Airbnb in all rental apartment buildings. Santa Monica has the same policy. However, both cities allow “home sharing” where home or condo owners can rent out rooms in their home via Airbnb, provided the owner is present during the rental period.
Beverly Hills has not yet adopted a policy regarding Airbnb, but its zoning codes prohibit any rentals of less than 30 days, Otazo said.
As for Los Angeles, Ortega said the City Council has been studying the issue for the past two years, but has not yet passed an ordinance, which means that Airbnb is currently allowed in apartment buildings. “At the moment in Los Angeles, it’s the Wild West,” said Ortega. However, apparently not for much longer. Ortega expects the Los Angeles City Council to soon pass an ordinance prohibiting Airbnb rentals in rent-controlled buildings but will likely allow “home sharing.”
1. I can't afford to buy a home now."
FACT: If you're paying rent, you can buy.
2. "I should wait until the real estate market gets better."
FACT: The long-term factors, not the short-term market, are what make real estate one of the most stable investments.
3. "I don't have money for a down payment."
FACT: Many options are available to make a down payment, some as low as 3.5 percent.
4. "I can't buy a home because my credit isn't very good."
FACT: A loan officer can help resolve credit challenges and explore your options.
5. "I can't afford to buy my dream home."
FACT: Buying a home and building equity puts you closer to that dream home than if you hadn't bought at all.
6. "I should wait to buy a home until I get married."
FACT: Again, getting in the game is key. If your future spouse doesn't like the home, rent it or sell it and put your incomes toward a new one.
7. "Buying a home seems way too complicated."
FACT: That's where we come in! We're ready to guide you through every step of the home-buying process by putting my local expertise to work for you.
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Crissi Avila will teach you how to buy smart. We’ll look at location, development, and turnover so you can spot opportunities long before most even start considering them.