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Risk Management for Multifamily Housing in San Diego, CA

Onyx • March 13, 2025
Risk Management for Multifamily Housing in San Diego, CA - Article Banner

Investing always involves risk - this is true whether investing in financial instruments or in real estate. 


Even successful, well-managed investments are not without risk. However, you can mitigate some of the most costly and frustrating risks real estate investors face by preparing for potential issues.


Multifamily rental properties present unique challenges. Instead of one home and one tenant, you must manage an entire building and numerous tenants, each with their own needs and expectations.


Let's discuss risk management and how to implement best practices for your multi-unit properties in San Diego.


It Starts with Insurance


Owning multifamily property increases your exposure to risks such as property damage, liability claims, and loss of rental income. Multifamily insurance provides a safety net, protecting your investment against unforeseen events.


Make sure your insurance policy provides the following:


  • Property Protection

Insurance for your multifamily investment property will cover physical damage to your property caused by structural problems, vandalism, or accidents. It ensures that your investment is protected, and you can claim unexpected damages.


  • Liability Coverage

Liability claims can arise from tenant injuries, accidents, or negligence. Multifamily property insurance includes liability coverage, safeguarding you from potential legal expenses and settlements.


  • Loss of Rental Income

Some insurance policies can compensate you for lost rental income if your property becomes uninhabitable due to covered damage. This helps maintain your cash flow during repairs and renovations.


  • Additional Coverage Options

You may want to consider buying additional coverage for potential hazards such as floods, earthquakes, and equipment breakdowns. These extras can be tailored to meet the specific needs of your property and location.


Keeping Tenants Safe 


Your San Diego tenants must feel safe in the building and their units. Conduct annual inspections to ensure the smoke and carbon monoxide detectors are working. Residents should also know the location of emergency exits and fire extinguishers. Do all stairways have handrails? Have balconies been inspected? Are there areas of broken flooring or torn carpet that may cause trip and fall hazards? 

Install secure reprogrammable or rekeyable locks at entry points. High-quality locks on doors and windows are a must for providing increased tenant safety. For added protection, consider installing deadbolts and security bars.


Security cameras can deter criminal activity and provide evidence if an incident occurs. To maintain transparency, tenants should be informed about the presence of cameras. Due to privacy concerns, security cameras should only be installed in public places, such as outside the building.


Conducting routine inspections and maintenance walk-throughs will ensure building integrity and structural soundness. Focusing on preventative maintenance will allow you to avoid expensive emergencies that can put tenants and properties at risk. 


Bad Tenants in Multifamily Properties


Bad tenants are always a risk to rental property owners. They can lead to late or unpaid rent. They can trigger evictions and disputes. You might find yourself dealing with property damage and lease violations when you have a bad tenant in place. 


This is a more complex issue when we’re talking about multi-unit properties. Tenants will not always get along with their neighbors, but you need to do your utmost not to place a tenant who may be a danger or a threat to the other residents in your building. 


Careful tenant screening is critical. Make sure you:


  • Check for past evictions. At Onyx Property Management, we do not approve tenants with past evictions. 


  • Evaluate financial stability. You’ll want to check credit and verify income and set a minimum credit score and income requirement (usually 2.5x-3x rent) for tenant approval. 


  • Conduct rental reference checks. Your rental criteria should indicate that a positive rental history is required. Ask former and current landlords if the tenant followed the lease agreement, had any late payments, gave enough notice before moving out, and treated neighbors with respect. 


Forging a
good relationship with tenants is also part of your risk-management plan. When you have responsible tenants in place, you can work together to maintain and protect your investment. 


Legal Risks and Liabilities

Laws in California

Be very careful of the risk that comes with fair housing violations, security deposit infractions, and a lack of understanding around habitability standards, rent control, and just cause evictions. 


The laws in California are strict. You know this as a rental property owner. Protect yourself by understanding the rules, complying with them, and staying up to date on all the changes. To help navigate these laws and understand their nuances, it is wise to partner with a San Diego property management team familiar with multi-family properties. As real estate professionals, Onyx Property Management stays up to date on laws to ensure that you and your property are in full compliance. 


We can tell you the difference between a service animal, a support animal, and a pet. We also know how much of a security deposit we can collect and when we must return it. We are knowledgeable about evictions laws and posting notices. We will write and update your lease agreement to reflect all evolving legal requirements. 


It’s often impossible to know where the most significant risks to your property may be found. Perhaps there is a large earthquake looming. Maybe you’ve placed a tenant who seems great but may ultimately break the lease and move out in the middle of the lease term. You could have a pipe slowly leaking behind a wall. A tenant might have an accident and initiate a lawsuit. 


We cannot predict every risk, nor can we avoid every problem. We can prepare for them, however, and we can make sure that the systems are in place to manage the fallout and mitigate the damage that is done to your multifamily property and your overall investment goals. 


Let’s talk about how we can help. Please contact us about your San Diego property management needs. 


Onyx Property Management serves San Diego and the entire county, including San Diego, Chula Vista, Oceanside, Carlsbad, and the surrounding areas. 

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