My wife and I are thinking about investing in multi-family (up to 4 units) in San Francisco for the first time since price is a little cheaper at the moment due to pandemic. However, we heard that SF is notorious against landlord and its rent control policy is no joke as well as professional renters who are out to get you. Any thoughts or advices on these subjects? We really appreciate it. Thanks!
I am from NC however have heard from almost all of my friends/partners who are from CA that typically do not invest there due to it being a tenant friendly state. This does not mean that you cannot find a good deal, however if you were to come across a bad tenant, you could face challenges trying to deal with them.
Have you considered finding deals outside of CA?
We haven't thought about investing outside of CA. We just want to invest locally so it would be easy to manage.
@Tam Pham , I would put this down to learning your market and screening tenants. Is CA generally tenant friendly? Yes. Are there very large successful public and private companies that only invest in CA, yes.
Like all investing, you need to understand the risks and balance with the rewards. CA has rent control, tough eviction process, high price relative to rents. But, most CA investors have seen much higher appreciation than many other markets. Being local, you can check out your property, and potentially self manage to save money. And just like another thread here: It is hard to short the 5th largest economy IN THE WORLD at $2.9 trillion of annual output.
Out of state investing involves not knowing areas as well, high cost to do site visits, managers, leasing agents, contractors, deals that you are trusting other people's opinions to perform.
I would talk with other CA investors, management companies, etc to get their perspective,as well as finding out of state investors here and in CA to understand what they are seeing. Then you can make an informed decision on the risks and rewards of each.
Thanks guys for all the insights.
I am currently in california as well. I havent discovered anywhere where the numbers work unless you are being a property at a deep discount or a rehab project where you fix it up yourself. I have been investing out of state. If you want it to be easy and hands off, try looking into turn key properties.
Another thing you can do is building an ADU and renting that out for a good buy and hold play.
@Evan Polaski Interesting points! Thanks for sharing.
A strategy we use here in so cal is to look for areas just outside of markets with stricter rent control. For instance, LA (our home market) if you stay in incorporated LA, its very tenant friendly, but the outer markets still work just as well and the only rent control is the state wide rent control.