SF rental rates in 2022 (1% rule apply?)

[Sam Byrd]

I purchased a new home in 2020 and started renting out my old home. It's in a nice neighborhood and we used the 1% rule. However over the last 2 years the appraise value of the home has risen from $250000 to $380000. He purchased the home in 2017 with 0 down for $230000. We have been renting it out for $2400 per month for the last year. The tenants under that contract are now moving out at the end of next month when we are trying to determine what anappropriate rental value would be based on this rapid appreciation. Is a gated neighborhood with a Community pool. Does 1% rule still apply or the 10% rule however it's calculated? Later? 1% of the homes value or 10% of the value over the year divided by 12 months?

[Bill B.]

Neither. If your home falls in value do you plan to lower the rent? Market rent is what people will pay to live in what is available for rent. There are plenty of people with $450k houses that would love to get $2,400/mo in rent.  It sounds like you are randomly guessing. You might find out a PM can charge enough extra rent to pay for themselves. 

More expensive properties rent for less per $ value than cheaper properties. When property values double rents might only go up 40-50%. Or less.