There are many benefits to renting out your home. Follow these tips to get the most out of renting out your property in San Francisco.
- Work with a property management company
San Francisco apartment rental agencies typically charge for two main services: finding and screening tenants, and managing the rental property, which includes rent collection, charging late fees, doing repairs, and handling untimely vacancies and evictions.
The main advantage of working with a property management company is that it allows emotional and physical distance. Although property managers take care of tenants, their primary job is to make sure you collect rent.
- Screen your tenants
Rental agencies San Francisco usually find tenants through online listings and newspaper ads. They will ask prospective tenants to provide pertinent information such as their legal names, employers, salary rates, previous landlords, and references.
They can perform a background check, with the tenant’s signed authorization, through the following:
- Checking credit reports through credit reporting agencies like TransUnion, Equifax, and Experian, provided you follow the guidelines under the Fair Credit Reporting Act (FCRA).
- Checking for criminal history through local and state records online.
- Checking references, such as previous employers and landlords.
If the property manager hires an online agency to do background checks, the agency must be accredited with the Better Business Bureau.
Ray Amouzandeh offers tenant placement services in San Francisco. Call him today to find and screen tenants.
- Have a written lease
A written lease helps each party understand their roles and responsibilities, as well as what is expected of them. Work with a San Francisco-based
lawyer to draw up the lease and avoid using templates from the internet, which may not cover the specific laws of your city.
Most landlords prefer a month-to-month lease, which offers more flexibility should you decide to sell, although an annual lease offers more stability if you intend to hold on to the property.
The lease should spell out the following:
- Terms of the lease
- List of tenants’ names
- Due date and penalties for late payment
- Security deposit
- Pet policy and pet deposits
- Eviction terms
- Repairs, i.e. which party is responsible for what
- Maintenance and upkeep
- House rules, i.e. acceptable noise levels, smoking, and general conduct
- Homeowner association (HOA) dues
- HOA rules and regulations
- Schedule for home viewings, if you intend to sell while the property is being rented
- Decide how much to charge
Check rental sites and ads in and around the neighborhood to determine how much the monthly rental fees should be. According to Rent Jungle, theaverage on-bedroom apartment rents for $3,600 per month, as of April 2019 – up 9.39% from the same time last year, and about triple the national average of $1,216 as of June 2019, a 1.5% increase from the previous year.
Although rent is higher in San Francisco, keep in mind that most rental units are covered by rent control, meaning landlords can only raise rental fees a certain amount per year depending on inflation, and can only evict tenants for justifiable reasons. The San Francisco Rent Board has detailed information on allowable rent increases per year.
Landlords can petition for rent increases, such as passing capital improvements through to tenants for a 10% maximum increase, or a 7% increase based on maintenance costs. However, these increases must be carefully documented and approved by the Rent Board.
There are certain exemptions to rent control. These include:
- New construction rental units, or rental units with a certificate of occupancy issued after June 13, 1979, with the exemption of accessory or in-law suites
- Subsidized housing, i.e. HUD housing
- Residential hotels, i.e. where people have less than 32 days of continued tenancy
- Dormitories, hospitals, nunneries, etc.
- Single-family homes with condo units
Talk to your property management to determine if your rental unit is covered by rent control.
- Get insurance
Protect your property with rental home insurance (RPI) which covers the damaged structure, repairs, legal fees, medical expenses, and rental income loss that may arise as a result of a fire or similar calamity in your rental.
Another type of insurance, called landlord liability insurance policy (LLIP), covers any damages or expenses that may arise out of the following circumstances:
- Wrongful eviction claims
- Wrongful entry claims
- Libel and slander claims
- Non-bodily-injury claims
San Francisco-based insurance agents may also recommend purchasing a personal umbrella insurance policy that provides added protection against the risks of property management and ownership.
You should also encourage tenants to purchase renters’ insurance, which covers damaged or lost belongings in the event of a fire or other calamities.
- Get ready for evictions
If you need evict a tenant for any reason, keep in mind that you’ll need an attorney in order to do so. Refrain from barging into the home and
removing their personal belongings yourself. You’ll have to give them proper notice, take things to court, and get a sheriff to assist the tenant out of the property if they refuse to move out on their own. Get ready to shell over $300 to $1,000 in legal fees.
Let Ray Amouzandeh help you find tenants for your rental properties in San Francisco. Call him today at 415.494.7009 or send an email to SFHomez(at)gmail(dotted)com to get started.