Being a landlord in Costa Mesa, California, can be a rewarding venture. With its proximity to the beach, vibrant community, and strong rental demand driven by young professionals, families, and students near Orange Coast College, the city offers a lucrative market for rental property owners. However, success doesn’t come without effort. Many landlords—whether newbies or seasoned pros—make avoidable mistakes that can lead to financial loss, legal headaches, or tenant disputes. In this guide, we’ll explore the most common landlord pitfalls in Costa Mesa and provide actionable tips to steer clear of them.
1. Ignoring Local Laws and Regulations
Costa Mesa operates under California’s strict landlord-tenant laws, and failing to comply can land you in hot water. One of the biggest mistakes is assuming state laws are the only ones that matter. While California’s regulations—like the statewide rent control under the Tenant Protection Act of 2019—are critical, Costa Mesa has its own local ordinances that landlords must follow.
For instance, Costa Mesa enforces strict rules on property maintenance and habitability standards. Ignoring these can lead to fines or tenant lawsuits. Additionally, if your property falls under rent control (applicable to certain multi-family buildings built before 1995), you can’t raise rent beyond the allowable annual cap, which is tied to the Consumer Price Index (currently capped at 5% + CPI or 10%, whichever is lower).
How to Avoid It:
Stay informed. Regularly check the City of Costa Mesa’s website or consult with a local property management expert to ensure compliance with both state and municipal rules. Attend landlord workshops or join a local real estate association like the Apartment Association of Orange County for updates on legal changes.
2. Skimping on Tenant Screening
In a competitive rental market like Costa Mesa, it’s tempting to fill vacancies quickly. However, accepting the first applicant without proper screening can lead to non-paying tenants, property damage, or eviction hassles. With median rents hovering around $2,500 for a one-bedroom apartment (as of early 2025), you can’t afford to take chances.
How to Avoid It:
Implement a thorough screening process. Check credit history, verify income (aim for a rent-to-income ratio of 30% or less), and contact previous landlords for references. In Costa Mesa, where many tenants are young professionals or students, ask for co-signers if an applicant’s income is unsteady. Use reputable online tenant screening services, but ensure they comply with California’s Fair Housing laws to avoid discrimination claims.
3. Neglecting Property Maintenance
Costa Mesa’s coastal climate—think salty air and occasional humidity—can wreak havoc on properties if maintenance is ignored. A common mistake is delaying repairs or cutting corners to save money. Leaky roofs, faulty plumbing, or peeling paint not only violate habitability standards but also drive tenants away. In a city where tenants have options, a poorly maintained property won’t stay occupied for long.
How to Avoid It:
Schedule regular inspections—quarterly or biannually—to catch issues early. Prioritize repairs that affect safety or livability, like fixing heaters before Costa Mesa’s cooler winter months. Build a network of reliable local contractors; having a go-to plumber or electrician can save time and money. Set aside 1-2% of your property’s value annually for maintenance to avoid being caught off guard by big expenses.
4. Setting the Wrong Rental Price
Pricing your rental too high or too low is a frequent misstep. Overprice, and your unit sits vacant in a market where tenants can easily find alternatives in nearby Newport Beach or Huntington Beach. Underprice, and you’re leaving money on the table. Costa Mesa’s rental market is dynamic, influenced by seasonal demand (summer spikes near the beach) and economic factors like job growth in Orange County.
How to Avoid It:
Research comparable properties in Costa Mesa using platforms like Zillow, Apartments.com, or local MLS listings. Factor in amenities (e.g., parking, in-unit laundry) and location—units near South Coast Plaza or the 55 Freeway command higher rents. Adjust pricing seasonally and monitor vacancy rates. If your property lingers on the market for more than 30 days, it’s a sign to reassess.
5. Failing to Document Everything
Verbal agreements or casual communication with tenants can backfire. Without written records, disputes over lease terms, repairs, or security deposits become a game of “he said, she said.” In California, security deposit disputes are especially common, and Costa Mesa landlords must follow strict rules—returning deposits within 21 days with an itemized list of deductions.
How to Avoid It:
Document everything. Use a detailed lease agreement drafted or reviewed by a lawyer familiar with California law. Take photos or videos during move-in and move-out inspections, and keep a log of all tenant communications. For repairs, send written notices and retain receipts. Digital tools like Google Drive or property management software can help you stay organized.
6. Mishandling Security Deposits
Speaking of security deposits, mishandling them is a legal minefield. Some landlords mistakenly treat deposits as extra income or delay refunds beyond the 21-day window. In Costa Mesa, where tenants are increasingly aware of their rights, this can lead to small claims court battles—or worse, penalties for “bad faith” withholding.
How to Avoid It:
Treat security deposits as tenant money held in trust. California caps deposits at two months’ rent for unfurnished units (three for furnished), so don’t overcharge. After move-out, inspect the property promptly, deduct only for damages beyond normal wear and tear, and provide a detailed breakdown with receipts. Mail the refund via certified mail for proof of compliance.
7. Overlooking Insurance Needs
Costa Mesa’s location near the coast raises unique insurance considerations. Flooding from winter rains or earthquake risks (hello, Newport-Inglewood Fault) can catch unprepared landlords off guard. A common mistake is sticking with basic landlord insurance without tailoring it to local hazards.
How to Avoid It:
Work with an insurance agent to customize your policy. Standard landlord insurance covers property damage and liability, but consider add-ons like flood insurance (not covered by most policies) or loss-of-rent coverage if a disaster forces tenants out. Review your policy annually—Costa Mesa’s rising property values may require higher coverage limits.
8. Being Too Lenient—or Too Strict—with Tenants
Finding the right balance in tenant relations is tricky. Some landlords bend over backwards, allowing late rent or ignoring lease violations, which sets a bad precedent. Others adopt a hardline approach, alienating good tenants in a market where retention saves money (vacancy turnover costs average $1,000-$3,000 per unit).
How to Avoid It:
Be firm but fair. Enforce lease terms consistently—charge late fees as outlined, no exceptions. At the same time, build rapport by responding promptly to requests and showing flexibility for reasonable issues (e.g., a one-time payment extension for a reliable tenant). In Costa Mesa’s community-oriented vibe, a little goodwill goes a long way.
9. DIY-ing Everything
Many landlords try to save money by handling leasing, maintenance, and legal matters themselves. While this works for some, it’s a mistake if you lack the time or expertise—especially in a regulated market like Costa Mesa. Missteps in eviction proceedings or lease drafting can cost more than hiring a pro.
How to Avoid It:
Know your limits. For complex tasks like evictions (which require precise notices under California law), hire a local attorney. Consider a property manager if you own multiple units or live far from Costa Mesa. Their fees (typically 8-10% of rent) often pay off in reduced stress and better tenant retention.
10. Not Planning for Vacancies
Even in a hot market like Costa Mesa, vacancies happen. A common mistake is assuming your unit will always be occupied and failing to budget for downtime. With turnover, cleaning, and marketing, a vacant month can easily cost you thousands.
How to Avoid It:
Build a financial cushion—experts recommend saving 3-6 months of expenses per property. Minimize vacancies by renewing leases with good tenants (offer a small discount if needed) and listing early when a tenant gives notice. In Costa Mesa, timing matters—aim to re-rent before the summer rush cools off in late fall.
Final Thoughts
Landlording in Costa Mesa offers great potential but demands diligence. By avoiding these common mistakes—staying legal, screening tenants, maintaining your property, pricing smartly, documenting everything, handling deposits correctly, insuring adequately, balancing tenant relations, knowing when to delegate, and planning for vacancies—you can maximize your investment and minimize headaches. The key is to treat your rental business like a business: proactive, informed, and tenant-focused. In a city as desirable as Costa Mesa, getting it right pays off in spades.
