3 ms·

You're ignoring the fact that SF has rent control; it resets only once a vacancy hits. If market rate was 3k a few months back, but is only 2k now, if you take

by cnst 6y ago

You're ignoring the fact that SF has rent control; it resets only once a vacancy hits. If market rate was 3k a few months back, but is only 2k now, if you take a 15-year view, it's still cheaper to let your rent-controlled unit sit unrented for 12mo than rent it at just 2k for 15 years provided the 3k/mo rates recover in two years. Basically, that's one of the major reasons why rent-controlled units aren't going down in prices. Bundle in Prop 13, and you aren't even paying any real property taxes on those units to sting your finances.

MAGZine 6y ago
No, I'm not forgetting that. In my experience, most market rate units turn over every 2 or 3 years. 15 years in sf apartment leases are unusual except for people who cannot afford to move out. If you assumption, as a landlord, is that the next person into your unit isn't moving for 15 years, then yes, the cost calculation moves. However, that calculation is very different from a 7 year calculation, which is very different from a 2 year calculation. So how much are you going to hedge against not losing money in the future, when you're losing concrete money right now?
- cnst 6y ago
  > 15 years in sf apartment leases are unusual except for people who cannot afford to move out. I'm a little confused here. If your rent is 1.2k for a 2bd in SF (because resident since 2000s), whereas market rate for a 2bd now is 3.9k in SF -- what is your determination -- is a person able or not able to move-out? Why would anyone move out every 2 to 3 years if they're rent-controlled, and they'd have to pay significantly more for any new place? Likewise, if you've been owning a property since the old times, and it's fully paid off, the property tax liability in Cali is tiny, and for older owners perhaps entirely a wash-off due to infamous Prop 13. Which is part of the reason that many owners don't even bother renting their properties.

by cnst 6y ago

MAGZine 6y ago

No, I'm not forgetting that. In my experience, most market rate units turn over every 2 or 3 years. 15 years in sf apartment leases are unusual except for people who cannot afford to move out. If you assumption, as a landlord, is that the next person into your unit isn't moving for 15 years, then yes, the cost calculation moves. However, that calculation is very different from a 7 year calculation, which is very different from a 2 year calculation. So how much are you going to hedge against not losing money in the future, when you're losing concrete money right now?

cnst 6y ago
> 15 years in sf apartment leases are unusual except for people who cannot afford to move out. I'm a little confused here. If your rent is 1.2k for a 2bd in SF (because resident since 2000s), whereas market rate for a 2bd now is 3.9k in SF -- what is your determination -- is a person able or not able to move-out? Why would anyone move out every 2 to 3 years if they're rent-controlled, and they'd have to pay significantly more for any new place? Likewise, if you've been owning a property since the old times, and it's fully paid off, the property tax liability in Cali is tiny, and for older owners perhaps entirely a wash-off due to infamous Prop 13. Which is part of the reason that many owners don't even bother renting their properties.