Property Management Blog

3rd quarter rental market data is available. What does it mean in 2021

System - Thursday, January 21, 2021
Property Management Blog

For many landlords, 2020 was a very tough year if you experienced a vacancy, or had a tenant who was impacted by the pandemic. Looking to put the pain of last year in the rear-view mirror may be a more difficult task in 2021. Most property management firms that I talk to are experiencing higher vacancy rates and longer vacancy periods. As a professional property manager myself, I am obligated to research and advise my clients. I'll preface my comments with this. The data that I am discussing today is from the city of San Jose's quarterly housing report. We manage property outside of the city limits but the smaller cities do not often, provide a report. Most of the data translates beyond the boundaries of San Jose with minor variations. It's also important to note that these reports come out long after the quarter has ended, as in this case. The information does not necessarily reflect what conditions are like here in the middle of January but we can glean some valuable information for the new year by looking back at these numbers. As we analyze the 3rd quarter rental statistics for the City of San Jose, how do we move forward in 2021? 


In summary form, here are the highlights from the report. We'll take them one at a time so as to provide some context for our clients. 

1. 453 residential building permits issued, 298 of which were for affordable apartments

Comments: We continue to see brand new rentals being introduced to the rental market. That inventory, which did not exist before, changes the landscape of our marketplace. The building permits issued throughout the year eventually become available rentals, in many cases. "Affordable apartments" is better described as affordable housing, or low-income housing.

2. 119 secondary unit / ADU (Accessory Dwelling Units) permits issued

Comments: So, what is an ADU dwelling? If your mother-in-law is coming to live with your family, you might consider building a separate unit in your back yard or even convert a garage space. These dwellings are usually on an existing property and usually have their own access and amenities. Many landlords are using these dwellings as rentals so you can see how that would add inventory to the marketplace as well. The city continues to approve these types of units because there is always a projected shortage of housing.

3. Average effective rent down 3% Quarter-over-Quarter (QoQ); overall residential vacancy rate is 7.4% 

Comments: If we were to compare the 3rd quarter of 2019 we would find that the average effective rent was only down 0.4% Quarter-over-Quarter (QoQ); and the overall residential vacancy rate was a meager 4.2%. When you drill down into the vacancy rate you would discover that some units are more adversely affected by the sluggish market in 2020 compared to the same period in 2019.

2020 studios 6.4% vacancy rate while in 2019 that rate was only 4.8%. 

2020 1 bedrooms 8.5% - 2019-4.5%

2020 2 bedrooms-7.3% - 2019-4.1%

2020 3 bedrooms-5.1% - 2019-3.4%

You can clearly see the challenges of 1 bedrooms and 2 bedrooms in this market place. If your property is having trouble renting it is likely due to the glut of properties on the market. The best way to counter that is be aggressive and price them competitively. Don't fall victim to chasing the market down. While there are gimmicks like move in bonuses and lower deposits being offered everywhere right now, it's my opinion that competitive pricing is the fastest way to rent your property. 

4. Renters must earn $51/hour ($106,080/year) to afford the average effective monthly rent for a 2-bedroom apartment of $2,652

Comments: The bar has always been pretty high in San Jose and surrounding communities. However, looking back on 2019, the hourly rate for renters to qualify has come down by two dollars. That is a significant drop. This further confirms the declining rental value of homes around here. 

5. Median single family home price is $1,250,000, up 5% QoQ3

Comments: Our city, along with so many other cities in California, is experiencing a phenomenon known as mass exodus. No, I am not talking about Moses leading his people out of captivity. People are escaping a different kind of captivity here in the golden state. High taxes, heavy regulations, poor management by local and state leaders, and the overall high cost of living. An added feature of this expanding exodus is the work from home policies being promoted by many of our hi-tech companies. This has become the norm in the Covid-19 era. It's true that people are fleeing the big city in pursuit of a simpler life. Large corporations are also fleeing the State and this could have a long term impact on our marketplace. Selling a home is very popular right now for these reasons. I believe it does impact our rental market but, how much, I don't know for sure. Some home owners want to get out of the market all together while other savvy owners may seek to turn them over to property management firms like our company.  

6. Buyers must earn $102/hour ($212,111/year) to afford a median-priced single family
home

Comments: This data correlates to the previous point and further illustrates the growing equity values of real estate in our city due to the exodus.

To answer my question from earlier, " how do we move forward?" Very carefully, I would say. Don't be locked in to a rent price. Understand that the market is always fluid and can change quickly. Qualify applicants well. Look a little closer at job history, and time on the current job. Don't take short cuts with applicants or just take their word for it. Don't let desperation force you into a bad decision. Finally, understand the value of a rented unit will always be greater than any extended vacancy. I am confident that our local market will recover when the covid-19 restrictions are lifted and more and more people take the vaccine. Hang in there my friends.

Well that does it for me. You can review all of the recent reports on our website at www.calwestrents.com/owners. Feel free to give us a call if you have any questions about our research or if you would like information on your specific rental property.

Robert Collins/Broker

Cal West Property Management



San Jose Property Management Tips to Stop the Endless Cycle of Tenant Turnover

System - Friday, December 18, 2020

Tenant retention helps you avoid vacancy and turnover costs, and it also establishes a consistent schedule of incoming rents. Many of the rental property owners we talk to are always asking how to retain tenants. 

Let’s focus on four important goals of owning rental property. As the owner of a rental home, you want to:

  • Rent a property out quickly

  • Keep it rented as long as you can

  • Maintain the property to a reasonable standard while limiting cost

  • Reduce liability over the life of ownership

San Jose property managers have systems in place to achieve all four of those goals. 

Strong Tenant Retention Helps Avoid Vacancy

The goal of tenant retention is to avoid the dirtiest word in the entire industry: vacancy. 

Costs for vacancy include advertising and preparing the property for rent. You’re paying for these and losing rental income at the same time, so avoiding vacancy is paramount. 

There are factors that dictate whether a tenant will stay in your property or move, and some of those things can be controlled. You can’t control a tenant’s job loss, health concerns, or family issues. You can’t control the economy moving towards a telecommuting model. During COVID-19, we’ve seen that renters no longer have to live in a place that’s close to work. Many of them are working from home, and they’re doing it from Idaho or Colorado or maybe even Hawaii if they’re smart. 

What can we control? Rent increases can cause good tenants to move. When you put the property on the rental market, you’re trying to get the most money possible. When you have a tenant in place, you want to trail the market a little bit. You don’t want to jack the rent up to market value every year because there will be competition in soft years. Tenants will find a cheaper place to live or maybe they will buy a home. 

Always do a rent increase notice with purpose. If your rent is $2,500 today, and the market says you could be earning $3,000, there’s probably room for an increase. Go up a couple hundred dollars if necessary, but don’t meet the $3,000 rent. We recommend you trail the market by 3 to 5%.

Maintain your San Jose Rental Property

Maintaining your property leads to higher tenant retention. It’s hard to believe, but a lot of owners don’t want to spend any money at all on their rental property. 

As an investment owner myself and as a property manager who manages hundreds of properties, I can tell you that it is very common. It’s also a big mistake. 

Respond to maintenance quickly and show your tenants that you expect the property to be well taken care of. Don’t blame your tenant when things break. Water heaters are going to leak over time. There’s little your tenant can do to prevent it. 

Encourage tenants to report maintenance even if you don’t think you are going to fix it. Knowledge is power, and you want to know when something is wrong at the property.

Develop a Positive Tenant Relationship

You also want to develop a good relationship with your tenant. I’m not suggesting you become best friends and have them over for dinner. Set your own boundaries and keep a professional distance. However, you should know who they are and who their families are. Get to know them on a personal level not so they can manipulate you, but so that they know that you care.

Provide Great Technology and Ease

You also want to offer technology and other conveniences that might benefit your tenants. As a private owner, you can offer them access to your handyman. As professional San Jose property managers, we don’t do that because we want our tenants to call us so we can control maintenance issues. But, if it’s just you managing on your own and you trust your handyman, let your tenants contact that person directly to speed up the maintenance cycle. 

If you are able to do so, offer online rental payments. At Cal West we have a 24-hour maintenance line where they can reach out to us at any time. Encourage your tenants to text you when there’s a problem or a question. This is a quick way to communicate, and many tenants prefer it to a phone call. 

Everybody deserves to be treated with dignity and respect, and your tenants are no exception to that. Your residents want to live in a home they can be proud of, and you can help make that happen by not letting your investment property turn into an ATM machine. When we forget the people that make it possible for us to cashflow our property, then it is just an ATM. 

If you’d like to talk more about tenant retention or anything pertaining to San Jose property management, please contact us at Cal West Property Management. 

The Benefits of Working with Cal West HMS for Property Management

System - Thursday, June 7, 2018

Cal West Property Management serves property owners and investors in San Jose and the surrounding areas. We are Julie and Robert Collins, and we have been the owners and brokers at Cal West Property Management for 20 years. Today, we’re talking about our credentials, and why a property owner would want to choose our company for any rental management needs.

Property Management Expertise: Julie Collins

When I was 12 or 13 years old, I would drive around with my parents, looking for investment properties. They would find some fixer-uppers and then rent them out or sell them. My father purchased a property management company, and I started working there when I was 16 years old. I was able to see the comings and goings of an actual office. I loved being at the properties and seeing the end results of my work. That was the fun part of property management for me.

A lot of experience comes with the years that we have put in. I can predict trends in the industry before they happen.

Choosing a Property Manager: Cal West Provides Professional and Personal Experience

We own investment property ourselves. We’ve been investing in rental properties locally and all over the state of California. So, we have gone through the process of hiring property managers for our own properties. We have been where you are – looking for a management company and wondering why we couldn’t get a call back, or trying to get an accurate description of fees and services.

This experience is helpful because at Cal West Property Management, we know how owners and investors are feeling and what they’re looking for.

Our company brings four decades of experience specific to property management. A lot of big real estate companies do property management on the side. They aren’t interested in becoming experts in the field. Instead, they’re funneling their sales cloud with property management. We don’t offer that dangling carrot at Cal West. We don’t sell homes. We’re here to manage property. It’s how we earn a living, and it’s our area of expertise.

Property Management San Jose: Trained and Educated Staff Members

Our staff is highly trained and experienced. From our accounting department to our office manager, they know everything there is to know about property management. There’s also a lot of longevity. Our accounting manager has been here for 20 years, and she knows what makes a statement correct. Our maintenance supervisor has been here over 15 years, and our entire team is good at what they do.

The educated and experienced team of professionals here has the knowledge to reduce your liability. We understand the state, local, and federal laws. We know what’s required to comply with city codes, and we understand rent control in various cities. Our property managers understand the difference between service animals and emotional support animals and pets. Managing marijuana in your rental property is a big issue recently, and we’re watching the legislation that may be coming. We have had an opportunity to fight for our clients at the local level. We go to city hall in San Jose and the state capitol in Sacramento to advocate for landlord rights. When you own real estate and you work in property management, these things are important.

Property Management San Jose: Technology and Processes

After being in this field for so long, we’ve seen tremendous changes in technology. Twenty years ago, everything we did was on paper or in our heads. Today, we work with a property management software system called Appfolio, which is designed specifically for residential property management. Between that and Google Calendar, anything that needs to be done with your unit or property is systemized and documented. Nothing falls through the cracks. We always know what needs to get done next.

We started this business as a portfolio property management company. That means each property manager did everything; we created forms, reviewed applications, showed properties, and scheduled maintenance. Busy was our constant state. Now, we are systemized. We have created departments, which provides a support system for property managers. We have a maintenance department, an accounting department, a leasing assistant, and front desk operations. This enables property managers to gather information and be there for their clients. It’s more flexible, and it allows us to work as a team.

Systemizing operations has left our property managers time to call their clients back, which seems to be a problem in our industry.

BenefitsWe save you time and hassles. We keep you compliant. We educate ourselves on the things that will help you. Our property assessments, responsiveness, and marketing tools will ensure your investment is protected. If you have any questions, or you’d like to hear more about why you should work with us, please contact us at Cal West Property Management.

Rental Marketing 101 | How to Market Your Rental Property in San Jose

System - Wednesday, April 19, 2017

There are a lot of proactive things you can do while marketing your rental property in San Jose. These tips we are sharing today will help get the quickest response and generate the most interest.


Focus on the Marketing Title


You might think you need a big title for your property, but you don’t necessarily have to use words like “beautiful.” Use the title to specify what you want the property to be known for. The title can include the number of bedrooms, bathrooms, and whether you have an upstairs unit. Pick one feature of the community that you think is valuable.


Writing the Body of the Ad


Once you get into the body of your ad, you can sell the property and talk about what this particular home is known for. Include information on what utilities are covered, what appliances there are, such as a washer and a dryer, and whether there is gas or electric. Features of the community are also important. If the home is in an HOA with a pool and a spa, you’ll want to include that information. Make sure prospective tenants know what kinds of restaurants, shopping, and businesses are close.


Include Outstanding Photos


Get lots of photos. Posting a video tour is one great option. You should also include a bunch of pictures that really show off the property. The better your photo quality, the better your results. You don’t want photos of dark corners where you cannot see the walls. Show the unit as sunny and not sad.


Where to Post


There are many different websites to post your ad. We post to over 30 different search engines. You’ll need to pay for some premium ads here and there. Try Zillow, HotPads, Trulia, and MyNewPlace. Craigslist is also great. On many of these sites, you’ll have to manage your ad. Check it every few days and refresh it when you can. Craigslist is notorious for its traffic, so after 10 minutes, your ad can be on the bottom of their list. That makes it hard to find. Refresh your ad every few days. Craigslist also has other challenges. It’s known for scams, where people will steal your photos and use them on their own fake ad in order to get money from unsuspecting tenants. This isn’t going to hurt you, but you want to help prevent the scam.


Signs and Open Houses


A sign is a good idea if traffic is going through the area. Identifying the place for rent is also announcing that the house is vacant, so check it periodically. You can do an open house or show the property every time someone calls. We believe that having a number of people arrive at one showing generates competition. So, you might say that you’ll be at the house for an hour or two on Saturday for anyone who wants to see it.


There is lots more we can talk about when it comes to rental property marketing. If you have any questions about advertising or anything pertaining to San Jose property management, please contact us at Cal West HMS Property Management.

Tips on Avoiding Tenant Eviction in Your Rental Property in San Jose

System - Monday, April 10, 2017


Many landlords are worried about San Jose tenant eviction, and that’s understandable. The process is expensive and time consuming. Today, we are sharing some tips to help you avoid an eviction. 



Understanding Eviction


First, you need to know what an eviction is, and what it isn’t. A lot of people will come to us and say they were evicted in the past, but they weren’t. They were simply given a notice to vacate. That’s different. An eviction is an unlawful detainer. This is a public record that’s done in a court. It takes about a week to serve the notice and go through the process. The unlawful detainer is the first step towards evicting a tenant in San Jose, once a three-day notice is served. 

Remain Engaged with Your Tenants 


It’s important to stay engaged with your tenants throughout the eviction process. If the tenant fails to pay rent, they will be evicted. But when a tenant fails to pay, you have to follow up and stay engaged. Encourage communication with your tenant. You can avoid eviction by working through the problems together and avoiding the awful mess that is an eviction. Tenants don’t want to be evicted; it stays on their public record and on their credit for a long time. This will prevent them from being able to rent in the future.  

Avoid Eviction with Incentives


Make sure you offer incentives. If your tenant won’t comply, or lost a job and is struggling financially, you can help them get out of the property without eviction. Maybe offer them money or give their deposit back. That’s a way to encourage the tenant to get out sooner without having to go through the process. An eviction costs $1,500 or more, so you want to avoid it if possible. 

Maintain Credibility 


It’s important that you be credible when dealing with tenants. If you have a reputation of waffling on promises or commitments, your tenants will feel like they can get away with more. Let them know what you’re going to do, then do it. This provides more credibility. Property management companies do a good job with this, while private owners are often more connected emotionally with their tenants. But you have to follow through. When a three-day notice is served and they don’t perform, give a final phone call and tell them you’re starting the eviction process. They’ll call you back. 

We don’t want to evict anyone. It serves us all to try to work together and figure out a solution. 

If you have any problems with tenants and evictions, or you’d like to talk about San Jose property management, please contact us at Cal West HMS Property Management.

How Do I Get the Best Tenants in My San Jose Rental Property? Management Tips

System - Monday, April 3, 2017


Finding a good tenant in San Jose requires a careful screening process. You want to make sure you’re placing a strong tenant who will take good care of the property. Today, we’re sharing some tips on how to do that. 



Property Management San Jose: Approval Criteria


Three things go into our approval criteria; a credit check, landlord references, and income requirements. When we look at credit, we aren’t looking for a specific score. We are looking for a long history of on-time payments. That means no late payments at all. We don’t want to see payments on the credit report that are 30 days late, and we don’t want to see any collection activity. Working in this field for over 20 years, we know that the number of on-time payments is in direct relation to how often the tenant will be late on rent. We see the credit report as a debt to income ratio report, and we also look for whether the applicant has been involved in any public court case. 

For landlord references, we go back to the last two places the tenants lived; or a minimum of five years. For income requirements, we look for tenants who earn at least three times the amount of rent. This is a standard.  

Prescreening Your Tenants 


Before you do any of this, prescreen your tenant. Ask certain questions prior to showing your property. If you don’t want a pet, cover that up front. We have comfort animals now and potential tenants don’t tell you the truth at the beginning. Pay attention to the details of what they’re saying. You also want to let them know your criteria. We have it on our website, but we go over it before we show a property. We ask them to drive by the property and get to know the neighborhood and area. 

Fair Housing and Your Application 


You need to know what’s on your application. Don’t discriminate with the questions you’re asking. We abide by the guidelines the city of San Jose has provided. That’s two persons per bedroom plus one. So, five people can live in a two-bedroom property. It’s a uniform thing for rental property in San Jose, but check with your city. This isn’t a requirement; there’s an occupancy limit and a suggested limit you can put on your rentals. 

Know what you can and cannot ask on your application, whether it’s a tenant’s birthdate or ethnicity. Make sure you go to CAA or TCAA to get a rental application. You have to become a member and pay a fee, but it’s worth it. You can also use the Rental Housing Network as a resource.  

We can help you with legal application forms and help with San Jose property management as well. If you have any questions, please contact us at Cal West HMS Property Management.

How Much Does Professional Property Management Cost in San Jose?

System - Tuesday, March 28, 2017


Property management companies range from small mom and pop shops to major corporate giants who dominate local markets. There’s a lot to discover as you go through the process of choosing a San Jose property manager, and it can feel like a daunting task. You’ll find different fees as you do your searches and try to narrow down your list. You need to know what you’re getting for the price you’re paying, so we want to offer you some advice today.  



Flat Fee vs. Percentage Based Fees 


You might see different platforms when you’re looking at the property management cost in San Jose; the flat fee system and the percentage based system, which is more like a performance based system. The flat management fee is when you agree to pay a certain amount every month for whatever services the company is providing. That fee is paid regardless of what is happening with the property. If your home sits vacant for six months, that fee still is charged to you. If the property is rented quickly, you get the advantage of that flat fee because you don’t have to pay anything extra. A disadvantage is that even if the property manager is performing, but the tenant decides not to pay rent, you are still paying that fee to the property manager. There’s an advantage to knowing what you’re going to pay every month but you also can’t be sure if the company is going to be motivated to keep your property rented. 

The percentage system is more of a performance based product because if the manager doesn’t get your property rented, that manager won’t be paid. If a tenant doesn’t pay rent, the manager isn’t getting paid. In this system, the fees can range from between 5 to 10 percent of the monthly rent. Some companies on the lower end might not provide all the services you expect, and those charging 10 percent might be larger companies that don’t need to compete on price. 

Additional San Jose Property Management Fees


Another fee you can expect is a leasing fee. This is charged when the property is vacant and your property manager gets it rented out. This is the most intensive part of the property manager’s job. There’s marketing and showing the property, as well as qualifying the applicant and moving in your tenants. Sometimes, there are advertising costs involved. Leasing fees can be a flat amount or a percentage of the first month’s rent, usually between 10 percent and 100 percent. 

Set up fees may be charged to create your property in the company’s database, and get your financials organized. A coordination fee or a repair mark-up might be charged as well, typically when you have maintenance costs. Some companies charge that because they’re general contractors or just because it’s another revenue source for them. There’s a lot of work that goes into coordinating repairs, and some property managers will only charge for jobs more than $1,500.  

Compare Services and Reputation to Fees


Whatever you do, remember that a property management company is not simply about the fees. You’re not just choosing between one company and another based on price. Get a full- service company, and take the time to see what they offer and how they work. You need to know if they are organized and structured, and honest with their clients. Get to know the company before you choose one. It’s a bad idea to choose just on price. You have a large asset that they will manage, and it could be a retirement vehicle for you. You need someone who knows the laws and can take care of it. 

If you have any questions about San Jose property management fees, please contact us at Cal West HMS Property Management.

Life Beyond the Boom. Bay Area Rental Market Statistics

System - Wednesday, September 28, 2016
Property Management Blog

2nd Quarter Housing Statistics. Life beyond the boom for the Bay Area Rental Market

Qtr-4 Statistics quite revealing

System - Wednesday, April 8, 2015
Property Management Blog

Qtr 4 housing stats quite revealing

What has changed?

The fourth quarter housing numbers are out for San Jose and what can we say? During the most challenging quarter of the year for rentals our office experienced a bit of a lull in the market, but you wouldn't know it by these numbers. Like a hot air balloon in a wind storm, the cost of renting a home continues to rise and the percentage of people that can afford to live here plummets. Here are some of the highlights:

  • Record number of multi-family housing residential permits issued for 2014: This is the largest number of permits in a single year since Ronald Reagan was president. You would think with over 4,050 permits issued that we would have more housing available. Well not exactly.
  • Rent Price for a 3 bedroom 2 bath up 10% annually, to $3,047.00: Compared to December 2013 when the same property rented for $2,607.00, you can see why only 22% of our community can enjoy living here while nationally the average is 63%.
  • Vacancy rate near all time low: In 2013, the vacancy rate jumped up to 6.9% on the December report. This number does tend to fluctuate wildly in the last quarter but usually it is higher in December and trends downward throughout the remainder of the year. The natural vacancy rate for San Jose is set at 5%. Impressively, our vacancy rate during the first quarter of 2014 was higher than our December number. What does that mean? For Santa Clara County, the first quarter of 2014 ended with a vacancy rate of 7.9%, but as our year concluded, we came all the way down to 4.3%. Since the natural vacancy rate is 5% this means that we have virtually nothing available for rent.
  • Affordability out of reach for Police and Fire Fighters: This disturbing trend has been evident since I started following these numbers closely. Considering that most landlords and/or property management firms require the income threshold to be three times the rent, the average person has to earn $80,360.00 per year to rent a one bedroom apartment in San Jose. The average salary of a fire fighter is about 85,000.00. That is great if you are a single person in your early 20's but if you have a family forget about it. These are the people that protect our city and save lives.
Those are some of the highlights. These numbers change often and our company checks rents from May to July each year to see if a rent increase is due. Give us a call if you have any questions about our strategies or if you would like more information on the rental market. You can also go to www.calwestrents.com and click the tools and resources tab for the full report. 
"you can see why only 22% of our community can enjoy living here while nationally the average percentage is 63%."


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*|5589 Winfield Blvd., Suite 130, San Jose, Ca 95123|* 
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Vacancy rates rise in San Jose Again

System - Wednesday, April 2, 2014
Property Management Blog

Hello all,


I didn't blog on the third quarter housing numbers but I have been keeping track. Since 2009 I have been reviewing data provided by the City of San Jose. This data comes out quarterly and it helps us develop strategies for marketing our rentals. Go to our tools and resources page to see for yourself. I made some interesting observations by comparing the two quarters. First, in the 3rd quarter we saw the vacancy rate jump from 4.9% to 6.6%. This was news because the rental market had been racing along at a healthy pace like a well conditioned athlete at 4.9% or better for over two years. Then the 4th quarter statistics came out and, for the second quarter in a row, trended upward. Now at 6.9%, barely a tick away from 7% some might want to send up the flares, sound the alarm or launch the life boats.

Does this signal the end of our bustling rental revolution? Well it's hard to say. The Bay Area has always been desirable and even with California politics that make you shake your head and wonder if Yogi Bear is running things, we tend to recover quickly and endure hardship a little better than other markets. 7% isn't ideal but if it is any consolation, rents have continued to rise for most residential communities. That is unfortunate for any family making less than $103,000.00 per year but it does say something about the stamina, wealth and desirability of our local communities. The market ebbs and flows but I recommend being a little more aggressive with pricing your rental. Let us see where the summer leads us. 

Good day

Robert Collins


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Cal West Property Management

5671 Santa Teresa Blvd. Suite 102,
San Jose, Ca 95123

Phone: (408) 997-7100 or Phone: (408) 978-5466
Fax: (408) 904-7765
DRE # 01428710

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