The San Francisco housing market has been one of the hottest markets for the last four years, despite the steep ever-increasing prices of rental units. From 2012 to 2016, home prices rose 66%, which made buying into the housing market an impossible dream for many. However, the high cost of rentals has led to a never-before seen trend. Contrary to past trends, 1- and 2-bedroom units today are struggling against the rising popularity of 4- and 5-bedroom units. Soaring prices and changing job markets have shifted the tides of the in-demand market. Shifting Tides The job market and ‘cool’ factor of recent years has increased the attraction of the big city for masses of post-college adults aged 24-39. These younger folks often aren’t looking to settle down just yet, but they don’t want to spend $3000-$4000 on housing either. They’d rather spend money on travel and living...Read More→
Yearly Archives: 2016
People often say that if your product is good enough it will market itself. Back in the dot-com days, good enough was any vacant unit, for all we had to do was clean it and hang a “For Rent” sign out front. In just a matter of hours, there would be a line of people with applications in hand, hoping to rent your unit. These people were not looking for a view, laundry, gas stove and/or parking. In that tight market, they were simply hoping to find a vacant unit in the city by the bay. It is a very different story today. Unemployment is a reality to many, for most of the dot-com jobs have dried up or moved out of town. As a result, the number of vacant units has risen dramatically. “Good enough” is no longer any vacant unit. We now realize that we must each change...Read More→
Making Your Rentals More Marketable
Your unit is vacant. You have spent time cleaning it and upgrading the appliances and fixtures. Now the time has come to put it on the market. With the rules of rent control spinning in your head, you are determined to get the highest possible rent—so you aim high. Many landlords feel they can dictate market rents for their properties, so they market them on the high side. They take this approach in order to compensate for negotiations; and also in order not to be trapped with low rents in a rent- controlled unit. They conclude that by setting the rents high, they will eliminate financially irresponsible applicants. But in my experience, tenants dictate the market and what the market rents will bear. This is mostly a result of the Internet. Tenants are able to both research and compare available rentals more thoroughly than ever before, so this is why...Read More→
Aiming High Can Cost You Money
Recent news is filled with stories about the new tech boom in San Francisco and the resulting astronomical rental prices. Then, there’s the promise of the America’s Cup for short-term leases at sky-high prices. What’s really in the wind for San Francisco landlords? How do you chart the right course now and in the future? As a long-term San Francisco landlord and forward-looking investor, here’s some perspectives: 1) In the rental market, what you read is old news. This spring’s bubble of high demand and even higher rents is now starting to fizzle. For landlords, it’s time to get realistic about what you can expect in rents, and what renters expect from you. 2) You can’t expect quality tenants if you don’t provide quality. The tech-savvy tenants who can afford the high rents are looking for sleek, sophisticated surroundings that include the latest technology. Wires are out. Smart apartments with...Read More→