How bad is an Ellis Act for the owner?
I'm considering acquiring a duplex in SF with long-term tenants in both places. The property is priced low because of that. I intend to live in one of the units, and perhaps sell it in a few years, hopefully with a profit. Currently the yard is shared, which is not ideal for me. I have the following options:
- Owner move in to one of the units. Not ideal, as the yard will still be shared.
- Buyouts. With lawyer fees and two units, I think we're talking about a 100k easily? That is, if the tenants are interested.
- Ellis Act. I see people refer to that online as a last resort, but I'm not sure it's that bad. The down side is that I won't be able to rent the other unit (rent is low anyway), and it would prevent condo conversion in the near future. On the up side, when I sell, I'm selling a vacant property which will increase the value of the property.
I guess my questions are:
- What would you do?
- Is an Ellis Act affecting the selling price by a lot, due to the inability to rent in market rates and perform a condo conversion?