In San Francisco, renting out even a single unit can quickly become a full-time job. The rental market is so competitive and the legal requirements so strict that you need to be available and attentive around the clock. You invest in real estate to make money, not to be burdened by the day-to-day struggles that come with leasing, managing, and maintaining that real estate.
Some owners are still hoping to manage their own properties, though. It can work out for you if you have a lot of time and resources to dedicate to your investment. If you have a solid understanding of the rental market, the legal landscape, and the requirements of the state and local laws, you might be okay. When you’re trying to learn everything you can about managing properties, self-management may work out fine for you.
But, if you have time constraints and competing priorities, and if you’re not sure about the requirements for paying interest on a security deposit or you struggle with differentiating between a pet and an emotional support animal, you might want to talk to a professional San Francisco property manager.
There’s also the question of tenant management. In San Francisco, tenants are paying high rents, and they have high expectations. You’ll need to know how to attract and retain them, what to do if they don’t pay rent, and how to provide service while holding them accountable.
Self-managing a rental property can be done easily enough in some areas. In California, however, and especially in San Francisco, it’s a huge risk. There are so many mistakes that are easily made.
If you’re trying to decide whether to self-manage or hire a professional property manager, there are several things you need to think about.
Managing San Francisco Rental Property Risks
Tenants have a lot of rights in San Francisco. It’s not easy to evict them, even if they haven’t paid rent. There are strict rent control rules in place. You have to meet high habitability standards, and you need to know the particulars around Section 8 tenants, security deposits, fair housing laws, and inspections.
Renting out a property comes with a lot of liability. There are legal risks as well as risks with your residents.
If you aren’t up to speed in all fair housing and rental laws, you could make an expensive mistake.
This is perhaps one of the largest risks when it comes to self-managing your rental property. If you’re not following the development of new laws and how recent court cases impact existing laws, you could find yourself at a disadvantage. Professional management companies are dedicated to educating themselves on the local, state, and federal laws that deal with rental housing.
It’s not just about knowing that laws are in place. You might understand that rent control is a statewide issue now, but do you know that San Francisco’s history with rent control dates back decades? Do you know if your property is exempt or covered by the rent control laws? What is your relationship with the Rent Board?
All of these things are part of what property managers think about every day. We can keep you and your property in compliance because we understand the laws and the legal requirements at a very detailed level. We take classes and attend conferences just to stay up to date with our legal responsibilities and the pending changes that may impact how we manage rental homes.
Legal risk is always looming, but there’s also the risk that’s posed by unqualified tenants and deferred maintenance. There could be lawsuit risks and security deposit claims. You’ll need to be prepared for those, and it’s difficult to know how to respond when you’re managing your own property.
Professional San Francisco property managers can minimize your risk. We have the experience, the systems, and the procedures to keep you, your tenants, and your property safe.
Leasing on Your Own vs. Leasing with Professional Help
Leasing is especially difficult for self-managing landlords, and that’s because the process can drag on longer than it should, creating a larger vacancy loss. A longer-than-necessary vacancy is expensive, and often due to improper pricing, ineffective marketing, or a property that simply does not connect with prospective renters.
The contrast is a smooth and quick leasing process as managed by a San Francisco property manager:
- Property managers will prepare your property for rent in a way that they know will work for the tenants who come to see it. Your management company will make repairs and recommend potential upgrades that will raise your rental value.
- Expect accurate rental property pricing. You can count on your management team to set an accurate and competitive rental price that reflects the San Francisco rental market and takes the competing properties into consideration.
- There’s a professional listing with attention-grabbing photos. The listing is then shared on all the popular rental websites, gathering as much attention as possible to your available property.
- Showings that are responsive and convenient to tenants.
The screening requires particular care. It can be challenging to find a great tenant while staying within the parameter of fair housing laws. A property manager will have a consistent process that’s objective, fair, and rigorous. There will be a documented set of rental criteria.
Professional property management will always lead to a better tenant, a stronger lease, and a lower vacancy loss. Instead of trying to self-manage the leasing process, ask for help. It will take you a lot of time and money trying to figure out how to market your home on each platform, where to find the right pricing data, and where you should draw the line on how applications are accepted or denied.
Tenant Relationships: Placing, Retaining, and Working with Residents
Good tenants make the rental experience pretty easy. The wrong tenants can be a disaster for your rental property.
Maybe you’re worried about late rent payments, property damage, or lease violations. Those are valid concerns. In our experience managing properties and tenants in San Francisco, we know that good tenant relationships are an important part of earning as much as you can on your investment. When tenants are happy, they’re more likely to pay rent on time. They’re more likely to partner with us in taking care of your property. They’ll communicate whatever repairs are needed and they’ll be more likely to renew their lease agreement.
You can’t be too careful with tenants, and that’s why a property manager can be helpful. You don’t have to manage the relationship. You don’t even have to be the point of contact.
When you manage your own home, you often don’t have access to the nationwide credit, eviction, and criminal background checks that you need during the tenant screening and placement process. You might not have the time to verify income and employment, and you might feel uncomfortable calling current or former landlords to perform reference checks. Property managers take care of that. It’s part of our larger system of leasing properties.
Self-managing landlords might struggle during the renewal process as well. It’s not always easy to understand how much of an increase is acceptable. If your property is subject to rent control, there’s only so high you can go. Even if your property isn’t restricted by those rent control requirements, however, you still need to set a renewal rate that’s competitive. This requires deep market knowledge.
Placing the right tenant is important. Retaining the good tenants is even more important. In order to avoid those turnover costs, you need to establish a great tenant relationship that’s supportive and respectful. Property managers know how to do this.
San Francisco Rental Property Maintenance
Ask any investor working with professional managers, and they’ll tell you that maintenance is one of the best reasons to work with a San Francisco property manager.
Keeping your home in excellent condition is important to preserving its value. You need to know your asset is making you money as time goes on. Responsive maintenance also helps you keep good tenants in place. It leaves you with an appealing home that allows you to easily attract new tenants. While a self-managing landlord may feel like they’re playing catch-up when it comes to responding to maintenance requests, property managers are prepared. We have systems in place and a lot of experience that helps us respond right away to emergency and routine repairs.
When you work with a property manager, you also have the opportunity to leverage the relationships we have in place with vendors and contractors. This will help you when you need a plumber in the middle of the night to respond to a leak.
Most property managers get discounts from the vendors they use, because of the volume of work they’re able to provide. That’s not a pricing point you can usually access as a self-managing landlord.
If you’re still trying to decide whether you want to manage on your own or look for a professional management company, we’d love to talk to you about our services and how they can help you. If we think you’re well-suited to manage your own property effectively, we’ll tell you that too, and happily serve as a resource for you. Please contact us at Sharevest Property Management.