A Tricky Proposition: Buying a Small Investment Property
Purchasing a small investment property wherein the purchaser lives in one of the units and rents out the others is an idea my clients often want to discuss with me. Great idea, but this pursuit is multilayered and in San Francisco is further complicated by the rent control laws of the city.
The first piece of advice I offer is: become very familiar with the rent control laws of SF and how they can affect the new owners moving into the property and its subsequent use.
I can’t give legal advice as I’m not an attorney, and everything I discuss with clients looking at this option comes from my layperson’s perspective and should be confirmed by a real estate property attorney.
There are very good online sources for a more in depth understanding of the landscape for real estate investors and landlords in the city. Below are a few of them.
G3MH is a real estate law firm with landlord/tenant law as one of their specialties. They have a couple of very good articles on their website. One relates specifically to “Owner Move Ins” (aka “OMI”s). The other one covers updates to the rent ordinance that becamse effective this year.
If you like primary source information on rent control laws, the San Francisco Rent Board also has a very good FAQ page that can answer many of your questions. This link will take you to the page outlining the 15 allowable “just cause” evictions allowed in San Francisco. The bottom line is that an owner cannot simply ask their tenants to leave without having a legitimate, very good reason for doing so .
If you have more questions about purchasing tenant owned property in SF, then call me and I’ll be happy to give you my layperson’s viewpoint—keeping in mind I’m not an attorney.