San Francisco has a massive market for multi-family properties. The high demand for housing, coupled with the overall desirability of the City, has made it one of the most competitive markets for multi-family housing in the United States.
WHAT IS A MULTI-FAMILY PROPERTY?
A multi-family property has multiple dwelling units owned by one or several parties. Apartment buildings, condos, and duplexes fall under this category, except that with duplexes, the land and the property do get recorded on one deed. With Condos, the units are owned individually, and owners enjoy shared ownership of the common areas.
A property with four units or fewer is considered Multi Family building, and the investor may opt for a residential mortgage if they intend to occupy one of the units themselves.
A property with five units or more is considered commercial, and investors must follow stringent lending rules when financing one of these properties. One of the main reasons people invest in multi-family properties is because these properties generate a monthly income for each rentable space. Compared to single-family homes, where the investor only has one source of rental income, multi-family properties are a better investment because of cash flow from several sources.
Vacancies are less frequent and not as costly – even if one or two units become vacant, the investor will still generate income from the other units.
It’s also easier for investors to control the value of multi-family properties based on the individual units’ rental income.
HOW DOES RENT CONTROL AFFECT A MULTI-FAMILY
San Francisco is a city of renters – Approximately 62% of the households in San Francisco are renter-occupied, and 38% are owner-occupied. Rent control applies to older multi-family properties and not buildings constructed after June 13, 1979, when San Francisco’s Rent Ordinance took effect. It doesn’t apply to condos and single-family homes being rented out, either. That means none of the newer construction in the City is rent-controlled.
Rent control means that units on the market are rented out at market fair value rent, but annual increases will be limited from that point onward based on the rate set by the San Francisco Rent Board.
Multi-family properties with more than five units make up 52% of San Francisco’s housing units, and single-family homes, by contrast, occupy 62% of SF’s land area and account for only 27% of the housing market.
The City has some of the highest rents in the United States. There has been a recent spike in new construction, though most of it is at the high end of the market.
At TARGA Residential Brokerage, we aim to make the leasing process as seamless and hassle-free as possible for everyone involved. The team will be in charge of all the critical aspects of the leasing process, including valuation, marketing the property, screening tenants, preparing the lease agreement documentation, and coordinating move-ins.
We believe the success of any rental property depends on the quality of tenants – by providing only the best leasing services to landlords and property owners. We can connect them with only the most reliable and trustworthy tenants possible so that they can optimize their San Francisco real estate rental property, whether it is a multi-family building, a single condominium, or an apartment.
100% Approved Tenants with good income and excellent credit histories.
If you have a rental unit available now or soon, please get in touch with Ray Amouzandeh at (415) 494-7009 or email [email protected].