Are you debating whether to keep your San Francisco home as a rental while you buy in the East Bay? You are not alone. Many owners want to capture long‑term appreciation but are unsure about cash flow, rules, and the work of being a landlord. In this guide, you will learn how to run the numbers, understand San Francisco’s rental rules, and make a decision that supports your next move. Let’s dive in.
Start with your goal and time horizon
If you plan to hold the property for 5 or more years, renting can make sense if cash flow and risk are manageable. If you plan to sell within 1 to 3 years, renting often adds complexity and limits flexibility. Clarity on your timeline helps you weigh tradeoffs before you model the numbers.
How to run the numbers
Before you decide, build a simple cash‑flow model so you see what you will net each month. Gather these inputs for your specific home and neighborhood.
- Expected monthly market rent for your unit type
- Mortgage payment amount and terms
- Property taxes and any supplemental assessments
- Insurance cost as a landlord policy vs owner‑occupied
- HOA or condo fees, if applicable
- Operating costs you will pay: utilities, landscaping, routine maintenance
- Property management fee if you plan to hire a manager
- Vacancy and turnover allowance
- Annual reserves for big items: roof, systems, seismic or retrofit work
- Any local registration fees or potential relocation obligations
Basic monthly cash‑flow formula:
- Gross monthly rent
- Less: vacancy and credit loss reserve
- Less: management fee
- Less: operating expenses you pay
- Less: mortgage payment
- Less: property tax and insurance if not included above = Net monthly cash flow
Helpful planning ranges:
- Property management for long‑term rentals often runs 8 to 12 percent of monthly rent
- Vacancy and turnover reserve is commonly 5 to 10 percent of rent
- Maintenance reserves can be 1 percent of property value per year or 5 to 10 percent of gross rent, depending on age and condition
Model three scenarios: conservative, expected, and optimistic. Compute your break‑even rent so you know the minimum you need to cover costs. For perspective, also look at cash‑on‑cash return and an estimated capitalization rate to see if the yield meets your comfort level. San Francisco rentals often have lower cap rates than other markets, so your decision may rely on long‑term equity and appreciation rather than near‑term cash flow.
Important financing note: some lenders require you to qualify for both mortgages at once or have owner‑occupancy conditions tied to refinancing. Check with your lender early in the process so your East Bay purchase stays on track.
Tax considerations can change how the math looks. Rental income, depreciation, and capital gains rules are individual. Consult a qualified tax advisor to understand your situation.
San Francisco rules that shape your options
San Francisco has a detailed framework that affects rent setting, evictions, and short‑term rental use. The specifics depend on your building, construction date, and tenancy history. This high‑level overview will help you ask the right questions.
- Rent Ordinance coverage. Many units are covered by the San Francisco Rent Ordinance. Coverage can limit rent increases and creates just‑cause eviction protections. The San Francisco Rent Board is the best place to verify whether your unit is covered and to what extent.
- Just‑cause eviction protections. In many cases, you must have a legal reason to end a tenancy. Owner move‑in and similar actions have strict requirements and can trigger relocation payments and timing rules.
- Relocation payments. Certain no‑fault evictions require significant relocation payments that change over time. Check the current schedule with the Rent Board before you make plans.
- Ellis Act. Removing a unit from the rental market triggers notices, relocation obligations, and limits on re‑rental. This path is complex and time‑bound.
- Statewide protections. California’s Tenant Protection Act, often called AB 1482, applies to many units across the state. Local rules like San Francisco’s may provide greater protections. Know how they interact for your property type.
- Short‑term rentals. San Francisco requires registration and has a primary‑residence requirement and tax rules for short‑term rentals. Renting your SF home short‑term while living in the East Bay is often restricted or not feasible unless you meet strict criteria.
- Registration and business requirements. You may need to register your unit and comply with inspections or business registration, depending on your use.
Why this matters to you: these rules can limit how fast you can raise rent, increase the cost to regain possession, and reduce flexibility if you want to sell or move back in on short notice. Confirm coverage and obligations for your specific property with the San Francisco Rent Board or a local landlord‑tenant attorney before you commit to a rental plan.
Operational realities of being a remote landlord
Even if the math works, daily operations can make or break your decision.
- Management choice. Self‑management lowers fees but raises time and compliance risk. A professional manager typically charges 8 to 12 percent of monthly rent for long‑term leases and handles marketing, screening, rent collection, repairs, and notices.
- Turnover cost and vacancy. Plan for cleaning, paint, minor repairs, and any leasing fees at turnover. A conservative model uses at least one month’s rent every few years or a set reserve per year.
- Maintenance and capital needs. Older San Francisco homes can need seismic work, plumbing, wiring, or foundation repairs. Budget reserves so surprises do not disrupt your East Bay purchase plan.
- Insurance. A landlord policy usually costs more than an owner‑occupied policy and has different coverage for vacancy and rental use. Check your carrier before you list for rent.
- Local support. If you move to the East Bay, set up a trusted local emergency contact and a reliable contractor roster. Time zone is not an issue here, but response time is. A manager can help if you cannot visit on short notice.
Short‑term vs long‑term rental tradeoffs
- Long‑term rental. Predictable cash flow, lower management fees by percentage, and fewer turnovers. Rent growth can be limited by local rules, and regaining possession can take more time and require relocation payments depending on the reason and coverage.
- Short‑term rental. Potentially higher gross revenue in peak periods but higher management fees, more wear and tear, frequent turnovers, and strict San Francisco registration and primary‑residence rules. Many owners who relocate find long‑term leases safer and simpler.
How renting affects future resale
A tenant in place can narrow your buyer pool. Many buyers want to occupy the home or have lender restrictions that favor vacancy. Showing access and timing can be harder with a tenant, which can affect the sales process and sometimes the price. If you plan to sell soon, a short fixed‑term lease with a near‑term end date can be helpful, provided it fits local rules. If your horizon is longer, reliable tenants who care for the home can help preserve condition while you build equity.
When the market softens, some owners rent for a period, then sell when demand improves. This can work, but you must be comfortable with possible negative cash flow and the obligations that come with being a landlord during the hold.
A practical decision framework
Use this checklist to move from idea to a sound plan.
A. Collect your data
- Get accurate rent comps for your exact unit type and neighborhood
- Add up your full carrying cost: mortgage, taxes, insurance, HOA, plus utilities you pay
- Confirm lender rules for keeping and renting your current home while buying in the East Bay
- Check whether your unit is covered by rent control and just‑cause eviction rules with the SF Rent Board
- Obtain property management quotes and scope of services
B. Build your financial model
- Run conservative, expected, and optimistic scenarios
- Compute break‑even rent and cash‑on‑cash return
- Include one‑time compliance or registration costs
- Keep an emergency reserve that covers at least 3 to 6 months of payments
C. Decide how you will operate
- Choose self‑management or professional management
- Set up contractor contacts for plumbing, electrical, and general repairs
- If considering short‑term rental, confirm registration and primary‑residence rules first
D. Check legal and regulatory risk
- Estimate relocation payment exposure if you might need to regain possession
- Understand restrictions for owner move‑in or using the Ellis Act
- Verify any required registrations or inspections before advertising for rent
E. Apply clear thresholds
- Keep and rent if projected net cash flow covers costs or any shortfall is acceptable within your financial plan, you are comfortable with rules and management, and your hold horizon is at least 3 to 5 years
- Sell if you cannot qualify for two mortgages, the expected cash flow is strongly negative and you lack reserves, or you want maximum flexibility to sell within 1 to 3 years
Quick pros and cons
Pros
- Potential to cover some or all carrying costs while keeping an asset that may appreciate
- Flexibility to benefit from long‑term equity and amortization
- Option value if you might return to San Francisco later
Cons
- Strict tenant protections can reduce flexibility and add costs for regaining possession
- Management and maintenance responsibilities, especially at a distance
- Possible negative cash flow and the need for larger reserves
- Tenant occupancy can complicate a future sale
When selling now may be simpler
If you are focused on a smooth East Bay purchase timeline, want full control over move dates, and prefer not to take on landlord obligations, selling your San Francisco home now can be the cleanest path. A vacant sale usually broadens your buyer pool and gives you more control over preparation, pricing, and showings. If you do choose to sell, thoughtful preparation and premium marketing can help you maximize your net proceeds and move forward with confidence.
Ready to map the best path for your move east and your San Francisco property? Reach out for a personalized plan that weighs your numbers, timeline, and goals. Connect with Cynthia Money to explore whether renting or selling sets you up for the strongest next chapter.
FAQs
What should I consider first when deciding to rent or sell my San Francisco home?
- Start with your time horizon and cash‑flow model. If you plan to hold 5 or more years and the numbers work with reserves, renting can fit. If your horizon is 1 to 3 years, selling often offers more flexibility.
How do I estimate if rent will cover my mortgage and costs in San Francisco?
- Use the cash‑flow formula: gross rent minus vacancy, management, operating costs, mortgage, taxes, and insurance. Build conservative, expected, and optimistic scenarios to see your range.
What San Francisco rules might limit my ability to raise rent or regain possession?
- Many units fall under the SF Rent Ordinance, which can limit rent increases and requires just‑cause for eviction. Certain actions can trigger relocation payments and strict notice rules. Verify your unit’s coverage with the Rent Board.
Can I operate my San Francisco home as a short‑term rental if I move to the East Bay?
- Short‑term rentals in San Francisco require registration and often a primary‑residence status. Many owners who relocate cannot legally operate STRs unless they meet strict criteria, so confirm rules before you proceed.
Will having a tenant make it harder to sell my San Francisco home later?
- A tenant in place can narrow the buyer pool and make showings and timing more complex. If you expect to sell soon, a short fixed‑term lease that ends near your target date may help, provided it complies with local rules.
What are typical property management fees for long‑term rentals in San Francisco?
- Long‑term management commonly ranges from 8 to 12 percent of monthly rent, with separate fees possible for leasing or major projects. Get written quotes and local references before you decide.
How much should I budget for vacancy and maintenance on a San Francisco rental?
- A common planning range is 5 to 10 percent of rent for vacancy and 5 to 10 percent of gross rent, or about 1 percent of property value per year, for maintenance. Older homes may need larger reserves.
