We have a Glen Park home with a nice 350 sq ft in-law unit that we never really use. We are thinking of renting it out long term and wondering about rules and regulations etc.
Hunted around on the web but can’t really find anything related to the renting of existing in-law units. Lots about conversions etc
Can anyone help or point me in the right direction.
Is your in-law legal? If so no problem and rent away! If not, might have to deal with legal issues should you run into a problematic tenant.
This is tricky business. First of all, you need to be ok with the fact that the in-law (really your whole house) will be covered under rent control, regardless of whether the in-law is legal or not. This means there will be a tight lid on the annual rent increase, and you can only remove the tenant with just causes (if you need to remove tenant). On top of the rent limit and just causes, you will be stepping into a role of a landlord (I assume you are not currently), so you need to be mentally prepared for that role. You need to learn to be comfortable dealing with tenants, and you need to learn to deal with tenants in the right way (post this notice, sign that notice, follow strict procedures, don’t say the wrong words, etc). This is a big step, so you have to convince yourself this is what you want for the extra income.
If you still want to move forward after the first step above, then the next step is to find out whether your in-law is legal. If it’s not legal, you need to make sure the in-law can be legalized and you have the means to legalize it in the event of someone reporting it to sfdbi. Ceiling cannot be too low, and all bedrooms must have windows that are big enough for egress purposes, and if a window has steel bars it must be openable from the inside. If your ceiling is too low, in the event you are forced to legalize it, you will spend a fortune digging down in order to lower the floor (with new foundation) to meet ceiling height requirement. If your in-law bathroom is on raised floor (for gravity drain), you may need to install a sump pump if you are forced to lower the bathroom floor but do not have enough slope in your sewer pipe. Better have a contractor check it out to convince yourself legalization is doable.
The next step is to convince yourself that you are ok with the assumed lowered value of your property that comes with legalizing the in-law. Your SFH becomes an MFH, and typically value will become lower since MFHs are valued based on projected rents. You might think that as long as the entire house is vacant when you sell it’s the same as an SFH. That reasoning makes sense, but SF is a very unique place that you might still get screwed. I can totally foresee that at some point in time someone is going to propose a new rule to force landlords to rent out all units or get penalized, and it’s going to receive overwhelming support from everyone that it will quickly become the law. So now your buyer is going to be stuck dealing with this situation, and he may not feel like paying top dollars for your property anymore. BTW, once you have created a new unit, you cannot demolish it anymore. That “loophole” has been plugged already in SF.
After all this, if you still want to rent it out, be my guest. Every little part that helps the dire housing situation is greatly appreciated by everyone in SF. There are so many evil landlords who hoard vacant units and don’t rent them out are the lowest of all citizens and you can pat yourself on the back that you are way, way better than every single one of them.
While I love and do rent out inlaws myself, please be mindful that your SFH otherwise would then convert essentially, in the eyes of the city, to a two unit building and thus the entire home with inlaw is subject to rent control. Since you live in the primary, you may not care, but you might.
I agree with @wuqijun, if the unit is FULLY legal, meaning built with permits, go for it. However, that usually means that only the rooms, electrical and bathrooms are built to code. Normally, you can’t have another stove or kitchen in a SFH. I have rented out a studio without a stove but of course not as desirable. Depends if you want just a little bit of action or a lot. Obviously with a stove another thing to kind of worry about.
If you do proceed, interview candidates fairly and according to law. You can not indicate in your posting(s) things like race or even number of folks. What I ask for is usually a write-up about the person(s) who will be sharing our home with us. Remember to at least show the place to everyone who is interested so that no one can say you are discriminating.
OK so the ‘Cottage’ is on the original city plans from ~1919 and lot is RH-2. So my assumption is the unit is probably legal. How do I confirm that?
Unit has bathroom by currently no Kitchen or Washer Dryer, so would need small amount of work to put those in the unit.
Thanks for the advice on the impact to the main house and rent control, need to think about that one further.
You should be able to check with City Planning Dept to understand fully what you have there. I would want to know if that cottage is what is in fact making the zoning be RH-2. What if it is not, and is completely separate?
Again, it sounds like you could rent out the cottage as-is without a stove. I would, if it has everything else. I would just give a small frig and microwave. I would not install a W/D. What I do is allow the tenant to use our W/D that is in the garage. Now, that means you might need to give access to your tenant to your garage. I don’t know if your garage is separate or locked from the main house or not. If so, and you usually lock the door to the garage, probably ok to give them access somehow for a load of laundry each week.
Now, while we are at it, and IF YOU WANT TOP DOLLAR, what about amenities (other than W/D) like cable tv and internet??? I personally don’t like to nickel and dime tenants, so I charge one price for everything each month. Up to you…
Why not just rent it out on Airbnb? You get income and none of the legal headache.
I believe our wonderful Bored Of Stupidvisors limits you on how much Airbnbing you can do per year.
It could turn into a huge issue you won’t be able to foresee now, especially if you don’t know much about SF rental laws
I would keep it vacant if your budget is decent. If you really need the money, you can probably make it really nice and furnished, rent at a very high rent for short term tenant. The rent needs to be really high so that no long term tenant would be willing to stay there for long term
If you are Airbnb’ing only part of the house while at the same time living there the limit is not too bad. Daily rent is higher and you can block off the days you don’t want strangers in the house.
Right, I guess they changed the rules early this year about the number of days you can do it if hosting part of your home. But, you have to pay for a license and be registered. Me don’t like either… I’ll take my chances just doing a regular rental. Frankly, as long as space is legal I do not believe inlaw renting is any more dangerous than a regular renter. But that is just me.
Thank for the feedback so far.
The unit is completely separate from the main house with its own side entrance. We thought about w/d in garage but that means shared space, which can we would like to minimize.
Airbnb - That was the original plan but limited number of days just don’t make it work the hassle in our minds.
Internet - already run down to the Cottage and don’t mind sharing that within reason,
Only other shared parts would be electricity runs via the main hour panel and hilt and cold water. So was thinking of an all in type price.