Real Estate Investor · Portland, OR · Member since 2016 · 71 posts · 25 votes
Rent control, taking out no-cause eviction and now paying for moving fees? How about having landlord to cover tenant's medical bills, student loan and auto insurance for next? Since when the City of Portland becomes so real estate investor unfriendly and on the other hand crying out loud for housing crisis?
Rental Property Investor · San Francisco, CA · Member since 2016 · 10 posts · 9 votes
9y
Kelvin, rent control in San Francisco applies to most units but not all. Per the rent ordinance the following are exempt (copied from https://www.sftu.org/rentcontrol/ so tenant's perspective):
" San Francisco’s rent control law covers most rental property in San Francisco. If you live in San Francisco, you are usually covered by rent control. The major exceptions are:
You live in a rental unit with a certificate of occupancy after June 13, 1979, with a few exceptions. This “new construction exemption” is the biggest exemption in San Francisco. The Assessor’s database, is where you can usually find out the date your building was constructed which will give the approximate date for the certificate of occupancy. Illegal units do not have a certificate of occupancy, so are covered under the Rent Ordinance unless exempt for other reasons. Some “accessory units” often called in-law units are still covered under rent control despite having a certificate of occupancy issued after June 13, 1979. (SF Administrative Code Section 37.2(r)(4)(D)) Unauthorized units that existed before June 13, 1979 and were brought up to code after that date are also still covered under rent control.
You live in subsidized housing, such as HUD housing projects. Tenants with tenant-based assistance such as Section 8 vouchers are still covered by the eviction protection of the Rent Ordinance, and sometimes covered by the rent control of the Rent Ordinance. Make an appointment with the Housing Rights Committee of San Francisco for assistance.
You live in a residential hotel and have less than 32 days of continuous tenancy.
You live in a dormitory, hospital, monastery, nunnery, etc.
What is the percentage of Cash on Cash return in Bay Area with all this restriction? With rent control, no-cause eviction and moving fee, how do all these impact the property value, cap rate and appreciation of the property? Are you making it up with higher rent in every turnover since the tenant is going to be there forever unless there is a reason of cause violation?
San Francisco, CA · Member since 2015 · 23 posts · 10 votes
9y
I think it all depends, at least in San Francisco. Most empty units or non-rent controlled units often sell quicker and higher given the lack of supply. These empty units and non-rent controlled units then become more valuable. Cap rates are usually not that high. You charge a higher rent when you purchase the property. I believe you also need a massive down or be an all cash buyer to cash flow enough to be worth the trouble. If it is subject to rent control, your yearly allowed rental increase is usually capped between 1-3%. The tenants are pretty much there forever unless you have a good reason or the use of the Ellis Act. Correct me if I'm wrong - for other people from SF.
Real Estate Investor · Portland, OR · Member since 2016 · 71 posts · 25 votes
9y
Never heard of non-rent controlled units. So the landlord can declare the property as non-rent controlled? Then the property as such got charged for higher property taxes?
Rental Property Investor · San Francisco, CA · Member since 2016 · 10 posts · 9 votes
9y
Kelvin, rent control in San Francisco applies to most units but not all. Per the rent ordinance the following are exempt (copied from https://www.sftu.org/rentcontrol/ so tenant's perspective):
" San Francisco’s rent control law covers most rental property in San Francisco. If you live in San Francisco, you are usually covered by rent control. The major exceptions are:
You live in a rental unit with a certificate of occupancy after June 13, 1979, with a few exceptions. This “new construction exemption” is the biggest exemption in San Francisco. The Assessor’s database, is where you can usually find out the date your building was constructed which will give the approximate date for the certificate of occupancy. Illegal units do not have a certificate of occupancy, so are covered under the Rent Ordinance unless exempt for other reasons. Some “accessory units” often called in-law units are still covered under rent control despite having a certificate of occupancy issued after June 13, 1979. (SF Administrative Code Section 37.2(r)(4)(D)) Unauthorized units that existed before June 13, 1979 and were brought up to code after that date are also still covered under rent control.
You live in subsidized housing, such as HUD housing projects. Tenants with tenant-based assistance such as Section 8 vouchers are still covered by the eviction protection of the Rent Ordinance, and sometimes covered by the rent control of the Rent Ordinance. Make an appointment with the Housing Rights Committee of San Francisco for assistance.
You live in a residential hotel and have less than 32 days of continuous tenancy.
You live in a dormitory, hospital, monastery, nunnery, etc.