Do you plan to rent out your home for a short term while you are on assignment in another city or country? Do you plan to move back into your home at some point? Are you planning to move away and sell your home eventually? It is important to know the answers because it is relatively easy – although expensive – to move back into your own home. It is not so easy to have tenants vacate in order to sell a home.

If you plan to move back into your home at some point, you can do what is known as an owner move in eviction. You will probably need a lawyer (which can cost about $2,500) and you need to pay a relocation fee of about $5,100 per tenant (although there is a maximum fee of around $15,000 in most circumstances). The rules allow an owner to do an owner move in eviction as long as they plan to stay in the home for at least 3 years after the eviction. If the tenants have been in the home for at least one year they need to be given at least 60 days notice.

If you plan to sell your home at some point, getting your tenants to move out is not so easy. Stephanie Gordon at Gordon Property Management in San Francisco advises homeowners that they will essentially have to wait until the tenants give notice and move out in order to have an empty house to sell. Because San Francisco limits your ability to terminate a tenancy, you cannot simply ask your tenants to move out once you have decided it is time to sell. And you do not want to sell with tenants in place, you will get a lot less than you would for a home that can be properly cleaned up, staged and marketed by a professional real estate sales agent.

Homeowners can raise the rent on their home as single family homes and condominiums are exempt from San Francisco’s rent control ordinance thanks to the Costa-Hawkins Rental Housing Act. You cannot however raise the rent sky high in the hope that the tenant moves out – that would be a constructive eviction and is not allowed. Any rent raise must be within the fair market rental value of the home.

Owners of single family homes who want to sell their property often make an offer to buy the tenant out of the lease agreement. Many tenants are co-operative and simply want time to find a new home and will accept a reasonable buy out to cover their moving costs. Others tenants are not very co-operative or very reasonable. When analyzing the income you will receive from renting out your home in San Francisco you need to consider what the costs will be in order to eventually move out the tenant.

There are actually 15 “Just Causes” to terminate a tenancy in San Francisco. As noted by the San Francisco Tenant Union they are:

• Tenant fails to pay rent, bounces checks frequently or consistently pays late.
• Tenant violates a term in the rental agreement or lease and the owner sends a written notice, but the tenant refuses or does not correct the violation.
• Tenant is creating or permitting a nuisance in, or substantial damage to, the unit, or interferes with the safety of other tenants or landlord.
• Tenant is using the unit for illegal purpose.
• Tenant’s prior rental agreement or leases has ended and the tenant refuses to execute a written extension or renewal of the past agreement for the same period of terms and time.
• Tenants refuse landlord entry to make repairs or agreed-upon improvements, or to show to prospective buyers.
• The rental agreement expires and the only person left is an unauthorized subtenant.
• Landlord or close relative of the landlord wants to do an owner move in (fees included).
• Landlord seeks to sell a unit which was lawfully converted to a condominium and does so “without ulterior reason and with honest intent.”
• Landlord seeks to demolish or remove unit from rental housing use, has necessary permits, and does so “without ulterior reason and with honest intent” (fees included).
• Landlord seeks temporarily to remove the unit from housing use to carry out “capital improvements or rehabilitation,” has necessary permits, and does so “without ulterior reasons” (fees included).
• Landlord seeks to carry out “substantial rehabilitation,” has necessary permits, and does so “without ulterior reason and with honest intent” (fees included).
• Landlord seeks to withdraw from housing use all the units in the building or a unit detached from another structure on the same lot, pursuant to the “Ellis Act.”
• Landlord seeks in good faith to temporarily recover possession of the unit for less than 30 days solely for the purpose of abating lead paint problems, as required by the San Francisco Health Code.
• Landlord seeks to recover possession in good faith in order to demolish or to otherwise permanently remove the rental unit from housing use in accordance with the terms of a development agreement entered into by the City under Chapter 56 of the San Francisco Administrative Code.

For more information on rules and regulations: City and County of San Francisco Rent Board

Homeowners should also consider the cost of professional property management when renting out their home. It is extremely helpful to have someone local to represent your interests when dealing with tenants in San Francisco. If you are getting top dollar for your home then your tenants are going to expect prompt attention to their maintenance and repair requests. Stephanie Gordon at Gordon Property Management in San Francisco charges 6% of the monthly rent for full service property management (there is however a minimum fee of $200 a month). Additionally homeowners pay a leasing fee of 50% of one month’s rent for Gordon Property Management to place a tenant in the home.

Demand for apartments in San Francisco is high but the most desirable tenants can be picky about what they rent.  Tenants are often young, educated and well paid and they want a nice place to live.  Even those who want to live in some of our edgy areas want nice amenities inside their apartment.

As an owner your end goal is to find the best tenant who will pay the highest rent and stay in your unit for a few years before moving on. When you have a vacant unit you can again raise the rent to market rent.  It is the perfect time to make any necessary improvements or upgrades to your property.

By doing so, you create a greater demand for your rental property and therefore can charge a higher rent. If you don’t fix up your unit you will get less rent – and you may be stuck with that rent for a long time (as long as the tenant stays, except for a small % increase each year).  In San Francisco it pays to make improvements sooner rather than later.

The tenants you are trying to attract tend to be picky when choosing a rental unit and according to Gordon Property Management in San Francisco, they should be. Tenants that have money, good jobs and a good education want a nice place to live.  These prospective tenants want a clean rental property with fresh paint, nice appliances, and attractive light fixtures.  They prefer wood floors over carpet. Consider replacing carpet with wood laminate flooring (this type of flooring can be 2-3 times the cost of carpet, but it will last longer and dramatically improve your unit).  If there’s carpet it needs to be new or almost new.  Nothing will turn off a prospective faster than stained carpet.

Purchasing something as simple as new knobs for all your cabinets is another fantastic addition an owner can make to a rental unit without spending too much. Old cabinets that reek of the 70s and 80s will often deter a great tenant, so if you can’t replace them think about painting them and changing out the knobs and hinges.  Add a new granite counter top and you have transformed your kitchen.  If you really want to improve your unit, upgrade the bathrooms and the kitchen. Although this is costly, a great bathroom and kitchen can often times be the thing that lands a tenant.

According to Gordon Management Property, tenants are increasingly looking for units that have a washer/dryer inside the unit. Having all the amenities tenants are looking for can be the best way to make your rental property stand out.

By following these easy tips any landlord in San Francisco can land an excellent tenant that will not only increase their income, but treat their rental unit with care.

It’s a number one priority to understand the basics of San Francisco’s rent control ordinance because it is complex and ever-changing. San Francisco’s laws severely restrict how much a landlord can increase a tenant’s rent.  The law also limits a landlord’s options when dealing with difficult or undesirable tenants.

Tenants have a lot of rights in San Francisco and property owners need to be educated in the rent ordinance in order to maintain the rights they do have as a landlord.   Property owners need to be proactive – not passive, according to Gordon Property Management based in San Francisco.

One of the key provisions of the rent ordinance dictates that rent can be raised only once a year and only by a specific % which is dictated by the Rent Board. Here are a few rules and regulations that fall under the rent control law from the San Francisco Tenant’s Union:

• Landlords can only raise a tenant’s rent by a set amount each year (the amount is set by the Rent Board each year and is tied to inflation).However, landlords can petition the Rent Board for additional increases for such things as capital improvements (for a maximum increase of 10 percent) or increased operating and maintenance costs (for a maximum increase of seven percent). These additional rent increases must be approved by the Rent Board before they can be imposed (this requires a fair amount of documentation by the landlord).
• Tenants can petition the Rent Board to decrease their rent if the landlord is failing to provide agreed upon or legally required services – i.e., the landlord takes away storage space, parking, washer/dryer, etc. or the landlord fails to maintain the premises as safe and habitable (uncorrected housing code violations).
• Helpful sites to learn more about the legal code: San Francisco Tenant Union and the San Francisco Rent Board.

Future San Francisco property owners should also understand the issues facing multiple roommates and the consequences to the landlord when one of the original roommates is replaced with a new individual.   Gordon Property Management strongly suggests that if a landlord encounters a roommate change they should not acknowledge the new roommate – that person should be considered an “unauthorized subtenant”.  They also state, “Don’t take a rent check, email, maintenance call, or anything from the new person.” By acknowledging only the original people who signed the lease you will have a better chance of raising the rent down the line.  Once all the original signers to the lease have moved out of the property you can raise the rent to market rent.  Unfortunately, long term tenants in San Francisco are often considered undesirable as San Francisco’s rent ordinance does not have any control over vacant units.  Landlords are allowed to raise the rent to whatever they want when the unit becomes vacant.

If you intend to manage the property yourself, Gordon Property Management – the San Francisco-based real estate management company, recommends joining the San Francisco Apartment Association (SFAA).   SFAA offers excellent benefits including a monthly magazine with advice from experts on dealing with the rent law; tenant screening services; and a lease agreement written by a team of attorneys and property management professionals which specifically address the SF rent ordinance .

When investing in any property always make sure to look at location and amenities.  What do renters want – what would you want in an apartment.  In SF, neighborhood and walkability are extremely important – nearby coffee shops, stores, parks, schools, food markets, public transportation.  Prized amenities include garage parking and a washer/dryer in the unit.

Currently, the rent market in San Francisco is much more active than in other parts of the country. With rent control and job availability in the Bay Area and Silicon Valley there is a pent-up demand for housing offering wonderful opportunities for investments in San Francisco residential real estate.