The following is a case study of how we, Crestmont Property Management, used the 3-2-1 Value Strategy™ to achieve significant gains in both income and valuation for a new client. This client completely self-managed a 2-bedroom, 1-bathroom detached home with a single-car garage in San Diego, CA for 15+ years. The house was built in the 1960s.
The clients were long-time, self-managed rental property owners. Despite their years of experience, they faced a few key challenges:
Below Market Income: The property was leased at a long-term rate of $3,500 per month with the same tenant for 3 years. The owners never increased the rental rate in accordance with the San Diego laws & regulations. This unfortunately is a common situation in self-management cases where the owner is typically unfamiliar with current laws or is uncomfortable raising the rent on someone they have to interact with on a regular basis.
Time Allocation: The property owner spent numerous hours each month addressing maintenance requests from the tenant. Significant time was consumed by addressing the same issues multiple times caused by unqualified, unlicensed, or uninsured vendors.
Maintenance Costs: In addition to vendor quality issues, the owner faced elevated costs due to inadequate maintenance practices, insufficient proactive or preventive care, and constant miscommunications between the owner and tenants.
After the client signed on with Crestmont Property Management, we took the property and applied our proven 3-2-1 Value Strategy™. The 3-2-1 Value Strategy™ is a strategy designed to optimize your rental income while ensuring your property remains appealing in the competitive San Diego market. We also implemented our proven property management services to get the property rent ready and tenant placed.
Crestmont was able to increase the rental rate from $3,500 to $4,750 per month — a 36% increase! Even though our 3-2-1 Value Strategy™ only assumes a 3% rental rate increase, we commonly see significantly larger increases in rental rates as we bring properties up to true market value.
Crestmont had the property ready to lease and a tenant placed within 27day! This was a major achievement due to significant maintenance jobs to address, including electrical issues caused by unreported maintenance needs.
Although the property had a tenant for the 3 years, the property sat vacant on the market for above-average durations due to some common challenges Crestmont was able to eliminate. Those challenges included:
The combination of Crestmont’s proven network of vendors, our proactive maintenance program with annual no-additional-cost inspections, reduced the owner’s maintenance costs by over 14%!