PROS AND CONS OF OWNING MULTIPLE SAN FRANCISCO PROPERTIES Property Management in San Francisco
As you think about your investment goals, you might be wondering how many properties you really want and need. San Francisco real estate isn’t exactly cheap. But, is it worth it to invest in more than one unit, or more than one building?
It depends, of course, on your investment goals. If you’re trying to build a San Francisco-centric real estate portfolio, you should acquire as many properties as you can. That doesn’t mean it will be easy.
Here are some pros and cons to consider when you’re thinking about what to buy and what not to buy.
SAN FRANCISCO CONDO RENTALS ARE GOOD INVESTMENTS
Here’s the thing. Condo rentals in San Francisco are in high demand. There was a lot of talk about a year ago that everyone was moving out of the city. Well, they’re coming back.
Well-qualified tenants are looking for condo rentals, and the more you have to offer - the more you stand to earn.
1. PRO: THERE’S SOME PROTECTION AGAINST VACANCY LOSS
One good reason to invest in multiple properties is that you’re setting yourself up to withstand any
vacancy loss that may come along. When a tenant vacates from the only home you’re renting out, that means you’re losing rental income and you’re also spending money on maintenance during the turnover period as well as utilities, etc.
When you own four or five properties, losing one rent check every month will still be unpleasant - but it won’t throw a huge wrench into your cash flow. You’ll still have rent coming in from those other homes.
2. PRO: YOU’RE GROWING YOUR PORTFOLIO
Yes, you’ll need to spend some capital when you’re investing in San Francisco condo rentals and apartments. However, these properties are valuable.
You could spend less in other markets. But, owning a handful of units in Boise doesn’t exactly give you the financial bottom line that a handful of units in San Francisco does. If you are interested in high dollar real estate with some serious financial leverage, you’ll want more than one property in this competitive and highly priced market.
3. CON: MAINTENANCE COSTS CAN BE A KILLER
Okay, it’s not all good news. Owning more properties means more expenses.
Maintenance, for example, is not getting any cheaper. Paying for repairs on 10 rental homes is a lot more money than paying for repairs on a single home.
But, when you own multiple homes, you can enjoy volume discounts from a lot of your best vendors. Because, instead of hiring them to service one HVAC system, you’ll be asking them to work on several. That should get you better price tags.
However, the expense of owning multiple San Francisco properties needs to be seriously considered before you move forward. You’ll need to figure out how to finance all of your investments.
Don’t forget about HOA and Condo Association requirements
It’s not necessarily something to put in the “con” section, but it’s also not always a “pro.” We’re talking about condo associations and HOAs. Do you want to work with one association or several associations? Get to know how they’re run and what’s required before you buy more than one property. No two associations are exactly alike.
SAN FRANCISCO PROPERTY MANAGEMENT
At BanCal Property Management, we’ve been helping San Francisco investors since 1987. If you’re still deciding how to structure your investment portfolio or you need some help understanding the local market, we’re your experts.
To hear more about our investment and management services, please
contact us. We also welcome your comments, questions, and suggestions for topics you want to learn about, so please share those too. What’s holding you back from buying more condo rentals?
