Ever thought about renting out your home or buying a rental property in San Francisco? If you’re wondering whether rental property management is your cup of tea, Nick Scarabosio of Jackson Group Property Management, is the perfect person to talk to. Here he explains some of the challenges property managers face in San Francisco and talks about some things to consider before you decide to become a landlord.
If you’re thinking about becoming a property owner in San Francisco, you’ll need to consider several things before taking the plunge. First, it’s important to understand that, assuming you can afford to do so, owning rental property in San Francisco is always a good idea. A major metropolitan area and a dynamic business hub, San Francisco offers an endless supply of renters. As with any business, however, a rental property only works if a) you have a desirable product, and b) you’re able to make a reasonable profit.
If you want to convert your existing home into a rental property, you will first need to consider whether your home offers something that renters want. If do own a property you think is particularly desirable (or you’re in a position to purchase one), you’ll next need to consider whether that property can really make money for you. That is, you’ll need to be sure that you’re able to charge enough for rent that you’ll be making a profit, but not so much that tenants will balk.
Once you’ve determined that you have a viable rental property, you’ll have to decide whether to take on the property management role yourself or call in an expert. In San Francisco in particular, there are at least two good reasons to leave it to the pros. Thanks to these two major factors - rent control and eviction control - San Francisco can be a difficult city in which to manage property.
For example, if you own a property in San Francisco built before 1979 (and most properties in San Francisco were), it is subject to rent control and therefore comes with a host of complex rules and regulations. These rules will determine the amount of money you’re able to charge for rent and how much you can raise the rent over time. Eviction control, which applies to all types of rental property in San Francisco, involves yet another tricky set of rules. The city’s eviction control provisions outline specific circumstances under which tenants can be asked to leave and dictate how much notice must be given before tenants are required to vacate.
Because of these complexities, managing property in San Francisco as a side job or a hobby can be a somewhat risky venture. If you’re not well-educated on the rules and able to devote adequate time to ensuring that these rules are followed, it can be easy to miss something. Even small mistakes can become expensive if you suddenly find yourself in court attempting to fix them.
Being a property manager also requires excellent interpersonal skills, objectivity, and patience. Not only do landlords have to deal with confrontation on a regular basis, they are constantly faced with issues like tenant complaints and damage to the property. Because as a property owner you have a personal and emotional stake in your property, it may be difficult for you to deal with these issues objectively.
Depending on the size of your property, you may also need to consider whether or not you have time to manage your own rental property. If you own a single-family home, for example, you’ll likely only hear from tenants a few times per year. If you own a 20-unit building, however, you can expect to be taking at least one tenant phone call each day. If you already have a full-time job, your tenants may require a bit more time than your schedule allows. Your availability should be a major factor in determining whether or not to become a landlord and, if you do decide to move forward, in determining the type of property to invest in.
