Property owners in Los Angeles can increase their property value by doing renovations.
The Los Angeles Housing + Community Investment Department (HCIDLA) allows LA property manager to recover the tenants’ cost of renovations through a rental increase. These rental increases could be temporary or permanent, depending on the nature and circumstances of the renovations.
The HCIDLA administers the following six programs that allow LA property owners to renovate for increased rental value:
1. Capital Improvement Program
Any property renovations or improvements that will benefit the tenant for 5 to 10 years are classified under this program. It does not include routine maintenance and repairs to the property. The Capital Improvement Program allows the property owner to apply a 50/50 cost split between themselves and the tenant. This includes renovations such as:
a. Curb Appeal
- Landscaping by cutting the grass and trimming hedges or trees.
- Painting the exterior walls, doors, and window frames.
- Paving the driveway or walkway with concrete or new bricks.
It is considered a good practice to paint the interior walls between tenants.
Suitable flooring is an essential factor that attracts tenants. Hardwood floors are more popular as they look modern and are easy to clean. Carpeting, on the other hand, is hard to maintain as it traps smell and dust/dirt, thus not so popular in rental properties.
d. Upgrading Kitchen and Bathrooms
The following renovations ensure long term benefit to the tenants:
- Installing stylish fixtures and faucets.
- Installing granite countertops.
- Installing modern appliances.
2. The Seismic Retrofit Work Program
This program is governed by the Earthquake Hazard Reduction Ordinance, which prescribes mandatory standards that property owners or managers must ensure to strengthen the resistance of the property to seismic activity, ground motion, or soil failure due to earthquakes. The cost to provide this ordinance can be shared 50/50 between the property manager and the tenant.
3. Primary Renovation Program
This program allows LA property owners to be reimbursed 100% of the costs they incurred on major repairs and upgrades to the property by increasing the rent permanently, even after the increased rent has fully paid for the upgrades!
The upgrades include repairing or replacing major building systems such as central heating/air conditioning, water and sewage piping, main electrical service upgrades and electrical wiring, elevators, reinforcement of the building structure, and lead-based paint or asbestos abatement.
4. Rehabilitation Work Program
This program is for eligible improvements mandated by federal, state, or local agencies through health, safety, or building codes or repairs due to damages caused by natural disasters such as fire, flood, or earthquakes. property manager can temporarily increase the rent to cover the repair costs.
5. Just & Reasonable Rent Adjustment Program
If the current year’s income from the property is less than the first year’s income, the program permits the property owner to adjust the rent to enable a fair return on their investment. This program is applicable only if the rental property is operating at a loss after one year of ownership.
6. Replacing Smoke Detectors
Property manager are permitted to recover the purchase price and installation costs of smoke detectors from their tenants. This is a self-help cost recovery program for property manager that does not require the approval of HCIDLA. It is a temporary surcharge applied to the rent, and it is removed once the costs are recovered.
Under the umbrella of HCIDLA, the above programs contribute towards the maximizing of ROI for LA property manager.
If you are looking for commercial remodeling, multifamily renovations, student-housing renovations, or other similar services in Los Angeles, Streamline Builders, Inc. is at your service! We offer premium renovation services at a great value for property managers in Los Angeles that are interested in offering our services to their residents. Schedule a free consultation today!