Help me not get screwed by adding my house to the rental market in San Francisco!
January 22, 2008 1:30 PM Subscribe
How do I rent my house in San Francisco?
I purchased a house in San Francisco a couple of years ago and I've been living there since. Now I'm planning to move to Europe, and I having been trying to figure out how to rent the house without getting screwed by the numerous tenant favorable laws in San Francisco. Technically its a two unit house, but all the space is open and used as one space. For those of you who are landlords or own real estate in San Francisco, I have heard there are alot of home owners like myself who refuse to rent because its too much of a headache. Have you given up or have you found a way to rent? A bit more detail about what I'm concerned about:
1. Renting and not being able to get the tenant out afterwards
2. Having to pay an exhorbitant amount to get the tenant to move
3. What are must haves in any lease?
* Requirement to purchase renter's insurance?
* How is rent set?
* Will I (as I suspect) be subject to rent control laws?
* Pets / no pets?
* I would like to rent it furnished, can/should I ask for extra deposit? If so, how much?
4. What if I rent to a room to a "roommate" rather than the entire house to the tenant? Do laws governing home owners who rent as roommate differ from those renting an apartment?
5. Are there any agencies that manage house rentals and could deal with repair calls, rent collection, and in the event its necessary, eviction?
6. Can I evict a tenant for non-compliance with the lease, for example, if I say no pets, but they get a dog, what can I do?
I purchased a house in San Francisco a couple of years ago and I've been living there since. Now I'm planning to move to Europe, and I having been trying to figure out how to rent the house without getting screwed by the numerous tenant favorable laws in San Francisco. Technically its a two unit house, but all the space is open and used as one space. For those of you who are landlords or own real estate in San Francisco, I have heard there are alot of home owners like myself who refuse to rent because its too much of a headache. Have you given up or have you found a way to rent? A bit more detail about what I'm concerned about:
1. Renting and not being able to get the tenant out afterwards
2. Having to pay an exhorbitant amount to get the tenant to move
3. What are must haves in any lease?
* Requirement to purchase renter's insurance?
* How is rent set?
* Will I (as I suspect) be subject to rent control laws?
* Pets / no pets?
* I would like to rent it furnished, can/should I ask for extra deposit? If so, how much?
4. What if I rent to a room to a "roommate" rather than the entire house to the tenant? Do laws governing home owners who rent as roommate differ from those renting an apartment?
5. Are there any agencies that manage house rentals and could deal with repair calls, rent collection, and in the event its necessary, eviction?
6. Can I evict a tenant for non-compliance with the lease, for example, if I say no pets, but they get a dog, what can I do?
If you are going to be out of the country, don't try to handle any of this yourself. Let a property management company worry about all of it it for you. These guys appear to handle single-family homes in San Francisco, although I don't know anything about them. They were just at the top of the hundreds of hits I got for a google search of residential property management agencies in San Francisco.
If you want a more specific recommendation, you should ask the realtor you worked with when you purchased the home.
posted by dersins at 2:14 PM on January 22, 2008
If you want a more specific recommendation, you should ask the realtor you worked with when you purchased the home.
posted by dersins at 2:14 PM on January 22, 2008
I rented the house I'm in now through a real estate/property management company although the owner decided not to actually use the property management services. So basically it was listed as a rental through the agency and the agency handled screening and interviewing all the applicants and putting together a lease. Once we signed the lease, we dealt directly with the owners so clearly there are different ways of structuring this type of arrangement. Our place was listed through Saxe Real Estate though I really can't recommend their services. Our limited dealings with them in the screening and lease-signing process wasn't all that great though they did manage to get the job done in the end. I was kind of happy that in the end, the owners decided not to use them as property managers after their service as listing agent was completed. So not really a recommendation. More like a warning.
posted by otherwordlyglow at 2:18 PM on January 22, 2008
posted by otherwordlyglow at 2:18 PM on January 22, 2008
This is the site for the San Francisco Tenants Union, which has a lot of excellent and useful information written in regular English rather than bureaucratese. While it’s written explicitly for renters, it has a good breakdown of what is and is not permissible.
You will almost certainly have to comply with rent control laws. More here, and some info on evictions here.
Get a property management company - you don't want to have to wrangle rent disputes or drippy taps from thousands of miles away.
posted by rtha at 2:20 PM on January 22, 2008
You will almost certainly have to comply with rent control laws. More here, and some info on evictions here.
Get a property management company - you don't want to have to wrangle rent disputes or drippy taps from thousands of miles away.
posted by rtha at 2:20 PM on January 22, 2008
Just addressing one piece of your question - yes, the rules are different if the owner lives in the unit. The tenant has fewer rights in that situation and can be more easily evicted. I'm not sure what one would have to do to establish residence as owner in that case, though.
posted by gingerbeer at 4:13 PM on January 22, 2008
posted by gingerbeer at 4:13 PM on January 22, 2008
It's good that you have questions. These particular questions, along with the obvious fear and inexperience underlying them, are why you absolutely need to hire a property management company. Because your inexperience is what would make the worst-case-scenario most likely to occur. The costs are measured in time and stress as much as money.
A good management company knows all of the applicable state and local laws including the current year's changes, have arrangements with all the various and sundry contractors you WILL need, maintain lawyer-approved landlord-friendly lease language, thoroughly vet prospective tenants, and otherwise generally look out for your interests. Your time will be well-spent in comparing different companies, because (speaking from unfortunate experience) there are many lazy services out there that will bleed a long distance landlord dry while a string of tenants turn your property into a crack den. But if you're responsible about seeking out a service that's devoted to maintaining your property and the investment you've made in it, it truly can be a very happy arrangement for all concerned. Including the tenant.
Talk to anyone you know who's dealt with local management companies, whether as tenants, landlord, employee, contractor. You'll find out pretty quickly which companies stand out. Some indicators:
* Regular maintenance, and quick response to repair calls, which avoids the nighmarishly big weekend/emergency friascos
* Good reputation among tenants, which ensures that top applicants are willing to apply for your apt in the first place
* Landlords feel that expenses have been well documented, reasonably priced, and justified
* Landlords and tenants agree that the applicant screening process is rigorous enough to weed out the bad prospects
* Contractors do not feel pressured to cut corners, pad bills, or defer routine maintenance
* Record of maintaining lower-than-avg vacancy, and lower-than-avg turnover
Note that rent income often is not necessarily going to be enough to cover the monthly nut. This is normal. In your own home, you can decide that you can stand to live without working heaters for a few months or that you're willing to let the downstairs toilet overflow 'til Monday to avoid triple OT charges. But as a landlord, many expenses simply cannot wait. In addition, the management co will take a percentage of rent as their monthly fee. And because bay area purchase prices have risen faster than rents in recent years, market rents simply may not be as high as the mortgage payment.
posted by nakedcodemonkey at 5:03 PM on January 22, 2008
A good management company knows all of the applicable state and local laws including the current year's changes, have arrangements with all the various and sundry contractors you WILL need, maintain lawyer-approved landlord-friendly lease language, thoroughly vet prospective tenants, and otherwise generally look out for your interests. Your time will be well-spent in comparing different companies, because (speaking from unfortunate experience) there are many lazy services out there that will bleed a long distance landlord dry while a string of tenants turn your property into a crack den. But if you're responsible about seeking out a service that's devoted to maintaining your property and the investment you've made in it, it truly can be a very happy arrangement for all concerned. Including the tenant.
Talk to anyone you know who's dealt with local management companies, whether as tenants, landlord, employee, contractor. You'll find out pretty quickly which companies stand out. Some indicators:
* Regular maintenance, and quick response to repair calls, which avoids the nighmarishly big weekend/emergency friascos
* Good reputation among tenants, which ensures that top applicants are willing to apply for your apt in the first place
* Landlords feel that expenses have been well documented, reasonably priced, and justified
* Landlords and tenants agree that the applicant screening process is rigorous enough to weed out the bad prospects
* Contractors do not feel pressured to cut corners, pad bills, or defer routine maintenance
* Record of maintaining lower-than-avg vacancy, and lower-than-avg turnover
Note that rent income often is not necessarily going to be enough to cover the monthly nut. This is normal. In your own home, you can decide that you can stand to live without working heaters for a few months or that you're willing to let the downstairs toilet overflow 'til Monday to avoid triple OT charges. But as a landlord, many expenses simply cannot wait. In addition, the management co will take a percentage of rent as their monthly fee. And because bay area purchase prices have risen faster than rents in recent years, market rents simply may not be as high as the mortgage payment.
posted by nakedcodemonkey at 5:03 PM on January 22, 2008
I'd contact one of the organizations listed above, except the Tenants' Union, which won't help landlords. Some other notes:
1. Your building is probably subject to rent control.
2. Which means you can rent your place for whatever you like. You set the rent. Once someone's living in it, though, you can typically only raise the rent a small, set amount determined annually by the rent board.
3. As you've figured out, San Francisco is a great place for tenants and a terrible place for landlords. You can put whatever you want in the lease, but if it conflicts with state or local law, the law will prevail.
4. I believe the maximum deposit you can ask for is twice the rent, regardless of whether the place is furnished.
5. Typically a landlord can evict a tenant for four major reasons: because s/he is taking the unit off the market permanently (Ellis Act, will cost you about $5K per tenant, impacts resale value); because the owner is moving in (requires you to live there for three years, costs about $5K per tenant); for a major capital improvement that renders the building inhabitable (but requires you to invite the tenant back after construction and perhaps pay relocation fees); and because the tenant violates the lease or the law (gets a dog, starts a meth lab, whatever).
6. You can say "no pets", but if a tenant has a pet and you're trying to evict them, there's always the (unfortunate) possibility that they'll ditch their animal instead of your place.
posted by stonefruit at 7:03 AM on January 23, 2008
1. Your building is probably subject to rent control.
2. Which means you can rent your place for whatever you like. You set the rent. Once someone's living in it, though, you can typically only raise the rent a small, set amount determined annually by the rent board.
3. As you've figured out, San Francisco is a great place for tenants and a terrible place for landlords. You can put whatever you want in the lease, but if it conflicts with state or local law, the law will prevail.
4. I believe the maximum deposit you can ask for is twice the rent, regardless of whether the place is furnished.
5. Typically a landlord can evict a tenant for four major reasons: because s/he is taking the unit off the market permanently (Ellis Act, will cost you about $5K per tenant, impacts resale value); because the owner is moving in (requires you to live there for three years, costs about $5K per tenant); for a major capital improvement that renders the building inhabitable (but requires you to invite the tenant back after construction and perhaps pay relocation fees); and because the tenant violates the lease or the law (gets a dog, starts a meth lab, whatever).
6. You can say "no pets", but if a tenant has a pet and you're trying to evict them, there's always the (unfortunate) possibility that they'll ditch their animal instead of your place.
posted by stonefruit at 7:03 AM on January 23, 2008
You might, alternatively, find a trustworthy local MeFite who will live there and function as property manager in exchange for low rent. Because of rent control, however, I would set their rent high, and pay them back each month. I'm sure you'd find takers here or it might even be applicable to jobs.
posted by wzcx at 11:17 AM on January 23, 2008 [1 favorite]
posted by wzcx at 11:17 AM on January 23, 2008 [1 favorite]
Whoever you pick for a property management company is your decision.. but have someone you trust swing by the place every so often to make sure it's still in good condition.
posted by drstein at 6:53 AM on January 24, 2008
posted by drstein at 6:53 AM on January 24, 2008
This thread is closed to new comments.
The San Francisco Apartment Association and Professional Property Management Assocation of SF might be worthwhile to contact for a list of PM companies. Unfortunately, I don't know any companies personally but I'll ask around with friends in real estate. The biggest in SF, West Coast Property Management, seems to be the one to avoid though (yelp.com).
posted by junesix at 2:08 PM on January 22, 2008