If you own a local rental property in LA, you are already aware that this market is competitive, expensive, and always changing. There are a lot of excellent ways to make money with your rental property. Maybe it’s occupied by a long-term tenant and you’re enjoying stable rental income while your equity and appreciation grow. Maybe you’re renting out a home to short-term guests and vacationers which can be especially lucrative when you consider the per-night rates that Los Angeles rental homes command.
Los Angeles is known for a lot of things, and one of the things that makes it globally recognizable is Hollywood. Films, television shows, and other productions are as much a part of this town as upscale shopping, high-end dining, and beautiful views of the Pacific Ocean.
You may not have considered this, but you’re also positioned to offer your property to Hollywood productions, which often need local rentals.
This can offer you a great opportunity, but of course with opportunities often come challenges. Whether you’re considering renting out your property for film productions or you’re just curious about its impacts and how you might leverage the ideal location of your rental, we’re helping owners decide whether or not they want to venture into the industry.
Los Angeles and its Population of Filmmakers
Hollywood easily attracts filmmakers, actors, and even location scouts who look for the perfect backdrop for the next blockbuster movie or indie hit. Property owners with an available home can tap into this lucrative market, providing locations that fit into whatever script is being brought to life. Here’s how offering your vacant property could potentially benefit you as a local owner:
- Increased Income. Film productions offer rates well above the market rents, allowing you to maximize what you’re earning. This can be a unique financial gain that’s only available to property owners in LA. This could be a great way to earn some extra money with a property that isn’t currently bringing in any rent.
- Short-Term Commitments. Unlike traditional tenants with a lease of a year or longer, film crews are usually interested in short-term rentals, freeing up properties for other uses throughout the year. You can take advantage of some downtime that your property has where there’s no one booked for the short term and no lease in place for the long term.
- Promotional Boost. Who would not want to be able to market their home as having appeared in a movie or a show? Having your property featured in a film can increase its notoriety and appeal, which is invaluable for future rental prospects.
Think about the money that can be made and decide whether it’s worth it to give up the security of a long-term tenant.
Addressing the Challenges
Engaging with the film industry isn’t all bright lights and red carpets. There are potential pitfalls too, especially when it comes to property conditions and liability. Let’s take a look at some of the challenges you’ll need to weigh against the opportunities.
- Wear and Tear. You can expect that there might be some maintenance that’s needed before, during, and after the filming. There’s also bound to be heavy foot traffic and some deterioration due to the equipment used by film crews. Expect to see some increased wear and tear on your property and be prepared to fix whatever is broken or displaced while it’s being used by the film industry.
- Legal Complications. Contracts for film productions are complex, requiring clear terms about property use, damages, and insurance obligations. You might be giving away more than you realize when you agree to allow filming at your property, so make sure you’re reading the fine print, and have your attorney review any contracts before you sign away rights to your investment.
- Disruption. Filming can disrupt the neighborhood, which might lead to complaints from the community or even fines if not managed properly. There’s also going to be some disruption to your rental business; if filming takes longer than anticipated and you have a short-term resident booked, you’ll have to deal with the fallout and the overlap.
These are challenges that can likely be managed with good preparation and clear agreements.
When You Say Yes: Steps to Take
To truly capitalize on Hollywood’s need for local rental properties in Los Angeles, here are a few tips to keep in mind from our perspective as experienced property managers:
- Negotiate Fairly. Ensure that you are compensated adequately for your property and that all potential risks are mitigated through comprehensive contracts. Don’t be afraid to set your expectations high.
- Understand the Process. If you’ve never done this before, you’ll want to find out what you can expect. Research what a film production entails and what it means for your property, including the scale and scope of the project.
- Prepare Thoroughly. Verify the production’s credentials, obtain necessary permits, and be aware of the legal and tax implications this may hold for you and your property.
One of the reasons that Los Angeles remains such a successful market for investors is that there’s always a demand for well-maintained rental properties in ideal locations. Not only does this demand exist among tenants, but members of the film industry, too. With proper management, the benefits can be significant.
Using your local real estate as an entry into the film industry is an interesting way to capitalize on the asset you own. It certainly provides some diversity to your portfolio, too, allowing you to earn money in a way that doesn’t involve a traditional tenant and the rent they pay.
Let’s talk about whether your property is well-positioned to get the attention of filmmakers in Los Angeles. We can discuss how this fits into your investment goals and whether it’s a good use of your real estate investments.
As local Los Angeles property managers, we can be a resource while you consider navigating these new waters. Contact us at Earnest Homes.
