Author: admin

Is it a good idea to rent out individual rooms? Nope. Sure if all goes well, you are making collecting more in rent than by renting out the rental unit as a single rental, but the potential problems are usually not worth it. Especially in a city in San Francisco where tenant protections are strong. Can you imagine having to do multiple evictions of non-rent paying tenants? Paying thousands of dollars in attorney fees (not to mention the lost rent) over a room rental that is $1,000-$1,800/month? Do you remember your old roommate days? I hated living with roommates. When unpleasant situations arises, the landlord does not hear the end of it. So and so is too loud, too dirty, parties, brings home guests, ate my food, etc. Who wants to be the mother hen to grown people? Not me.

The only situation I would say renting out individual rooms can be ok is if the landlord also lives in the unit. If the landlord and renter shares a kitchen or bathroom, then the San Francisco just cause ordinance does not apply. In that situation, the tenant is less likely to fight a lease termination.

I firmly believe that 90% of the hard work in being a landlord is choosing the right tenant. Let’s share some red flags! I recently came across a landlord with a tenant who stopped paying rent 6 months after moving in. The tenant complained about the plumbing and started asking questions about the permit history of the rental unit. The landlord dug around and found out that the tenant had previously sued a landlord before for the same issues the tenant was now complaining about. Make sure you look for any lawsuits the tenants have filed. You can search online case records by name with San Francisco County Superior Court and San Mateo County Superior Court. For Alameda County, you need to register for an account and pay $1 for each search.

When the COVID-19 pandemic really hit the Bay Area and counties instituted shelter-in-place orders, I wondered if I would be receiving my normal rent payments. By mid-March, San Francisco and Alameda counties issued shelter-in-place orders and life as we knew it came to a halt. As background I own a two-unit rental property in San Francisco and another two-unit in Oakland. I am paying a mortgage on each property. The rent payments pay for the mortgage principal and interest, property taxes and insurance. The properties don’t cash flow at all.

I didn’t initially hear anything from my tenants about April rent payment. Then on March 30th I received an e-mail from one of my tenants in Oakland explaining that he would have trouble paying rent. I wasn’t surprised since I knew that he would be directly impacted as he is in the service industry. I guess it was wishful thinking to expect that his girlfriend/roommate would kick in and cover his portion of rent for him. I told him that late fees would not be applied and that I could either offer a rent deferral or a temporary 15% rent reduction. He choose the temporary rent reduction. Two other units paid as normal. Another one paid rent late towards the end of April. So far three out of four May rent payments have come in.

I am thankful for my tenants and grateful that so far I have been able to make my mortgage payments!

You would be surprised how many landlords do not know the basics of the business.  What do you do when you have no clue?  The first thing is to get comfortable with rent control because chances are your rental unit is subject to it.

What is rent control?

Most people have a general understanding of rent control in San Francisco (known as the San Francisco Rent Ordinance).  People tend to understand that a unit that is under rent control means that the rent can only be increased by a certain amount and that the amount of the increase is typically small.   But the term “rent control” in San Francisco also is commonly used to describe the set of rules, called the Just Cause Ordinance, that controls when a landlord can evict a tenant.

Some properties are exempt from the rent increase limitations, but are still subject to the just cause eviction provisions.   Before becoming a landlord, it is important to understand whether your rental property is subject to the San Francisco Rent Ordinance and if so, whether this means that your rent increases are limited or whether you have a limited ability to evict a tenant or both.  How do you begin to figure this out?

The San Francisco Rent Board Website

If you’re going to be a landlord in San Francisco, you will be dealing with the San Francisco Rent Board.  Before paying a lawyer for a consultation, take a look at the San Francisco Rent Board website.   It is full of information and can answer most of your questions.  The rent board offers counselors in person at their office.  You can also call and have phone counseling.  You’d be surprised how many landlords and real estate agents call me for advise and have never even  thought of looking at the website, going to the rent board office or giving them a call.  I firmly believe that you have to do your best to educate yourself.   You can’t be lazy when getting into the rental business, that’s for sure.