Rent Control & Future of Property Management: Stacy Brown's Insights

Rent control, property management licensing, and evolving real estate laws are shaping the future of rental investments. With changing regulations, landlords and property managers must stay ahead to protect their investments and ensure profitability.

In this episode of the REalizations Podcast, I sit down with Stacy Brown from Real Property Management to discuss the shifting landscape of property management. Stacy has extensive experience training franchise owners, helping them navigate the complexities of real estate while building successful businesses.

We covered a lot—from the impact of new laws to the challenges of rent control and the future of single-family rentals.

Let’s break down the key takeaways from our discussion:

You can watch the entire podcast episode here:

What is Real Property Management?

Real Property Management (RPM) is a franchise-based company with over 456 locations across the U.S. It’s a unique setup because many franchise owners come from diverse backgrounds—not necessarily real estate. They invest in RPM because of its strong brand reputation and support system.

Stacy’s role? She trains new franchise owners and ensures they understand how to effectively manage rental properties. Her focus is on setting them up for success by teaching them the ins and outs of property management, from tenant relations to legal compliance and profitability strategies.

Types of Properties Managed

RPM specializes in single-family rental homes, which serve as the foundation for new franchise owners. However, as they gain experience, some expand into managing:

• Common-interest communities (HOAs)

• Apartment complexes

• Mixed-use properties

• Light industrial properties

This flexibility allows franchise owners to grow their business while serving a variety of real estate investors. For those investing in rental properties, working with a US mortgage broker can also be a crucial step in securing the right financing strategy to maximize returns.

Property Management Licensing: A Complex Puzzle

Stacy has held property management licenses in seven different states, but currently, she focuses on training and doesn’t hold an active license. However, she’s planning to get her Texas real estate license soon.

One key takeaway from our conversation is how licensing varies drastically by state. Some states require multiple licenses for different aspects of property management. For example:

• Nevada mandates three separate licenses to cover various real estate and property management functions.

• Some states require specialized licensing for reserve study specialists who estimate long-term maintenance and improvement costs for properties.

Stacy strongly supports a distinct property management license—separate from real estate sales—because property managers handle a very different set of responsibilities. Tuning in to real estate podcasts and participating in industry workshops are excellent ways for property managers to stay informed about these requirements and the latest industry trends.

The Growing Concerns Over Rent Control

Rent control is a hot topic in real estate, and its impact on property management cannot be ignored. While not widespread, some states are seriously considering new rent control measures. Stacy and I discussed why rent control can create serious problems:

• Discourages investment: Many property owners are reluctant to invest in rental properties when rent control limits their potential earnings.

• Reduces property maintenance: Landlords who can’t raise rents struggle to cover maintenance costs, leading to urban decay.

• Financial losses for landlords: When laws prevent landlords from passing capital improvement costs to tenants, they often take significant losses.

One example Stacy shared was San Jose, California, where landlords used to be able to pass improvement costs to tenants. However, recent legal changes prevent this, making it much harder for property owners to justify renovations.

Tenant Opportunity to Purchase Act (TOPA): A Threat to Property Owners?

Another emerging concern is TOPA, a proposed law that would allow tenants to buy a property at a 5% discount compared to the highest bidder. While this sounds great for tenants, it presents serious challenges for property owners:

• Devalues properties by forcing owners to accept lower offers.

• Complicates the selling process, creating additional hurdles for sellers.

• Discourages investment in rental properties, further limiting housing supply.

TOPA has sparked a lot of debate, and many in the real estate industry—Stacy included—believe it would create more harm than good for landlords and sellers alike.

Costa-Hawkins: A Law Under Threat?

The Costa-Hawkins Rental Housing Act currently protects single-family homes from rent control and allows landlords to regain control of their properties when leases expire. However, there are constant efforts to repeal it, which could spell trouble for property owners.

If Costa-Hawkins is repealed, landlords could face challenges such as:

• Losing control over their own homes (e.g., a professor renting out their house might not be able to reclaim it when returning).

• Expensive tenant buyouts—In some places, landlords already have to pay up to $20,000 per tenant to reclaim their property.

• Increased financial risks, making single-family rentals far less attractive to investors.

Final Thoughts: The Future of Property Management

Our conversation with Stacy Brown shed light on the rapidly changing landscape of property management. Between evolving rent control laws, complex licensing requirements, and controversial legislation like TOPA, landlords and property managers need to stay informed and adapt quickly.

What’s your take on rent control and property management laws?

Tune in to the REalizations Podcast

We feature engaging discussions with industry experts, offering insights and strategies to navigate these complexities.

Whether you're a seasoned investor or just starting, these insights are crucial for making informed decisions and safeguarding your investments.

Join us in our next episode where we delve deeper into innovative solutions and strategies to transform challenges into opportunities.