Only a few years ago it would have been hard to imagine that the gentrification of Echo Park would have crept down from the hills and into the 1400 block of Echo Park Avenue, where pedestrians once had to walk around an obstacle course of abandoned mattresses and sofas as gang members in white knee-high socks stared down passersby. The block of mostly 1920s Spanish-style apartment buildings still has its share of litter and tagging but investors have discovered the block, attracted by the potential to hike rents in an area just down the street from new restaurants, bars and shops.
Last year, after new owners purchased a 12-unit Spanish-style apartment building in the middle of the block, newly renovated one-bedroom apartments in the same building were listed on Craiglist at $1,40o a month – without off-street parking. Now, a few doors away at 1450 Echo Park Avenue, a bungalow court with seven homes painted in different colors has been put up for sale at $1.19 million. The monthly rents for the two-bedroom units in 1921 building currently range for between about $604 and $1,515 each. The property will probably need work and a buyer will need to come up with at least a down payment of $300,000.
Is this Echo Park bungalow worth that kind of investment and trouble? The sales brochures for the property suggests that the rents on each of the 744-square-foot bungalows could be raised to $1,600 a month, generated more than $11,000 a month in total rent. Says the brochure:
This is a very high rental demand neighborhood, as shown by the current high rents and nearby development.
Existing tenants are protected by rent control laws, which would require the owners to buy out residents if the units are to be re-rented out at much higher rates. But where is the renter paying $604 a month going to find another two-bedroom bungalow to rent at the same price?