San Francisco Landlord Shares Insights, Part I

San Francisco is known for its mind-boggling booms and breathtaking busts as global money ebbs and flows amidst startup frenzies and IPO manias. Those in and around the tech world are many of those who can afford the multi-million dollar prices tags on homes, or can pay $3500 in rent each month for a one bedroom apartment. However, we know that writers, painters, actors, cooks, police officers, teachers, small business owners, the under-employed and many in the service industry must find multiple income streams to afford to live here.

GGBIf you’ve ever rented an apartment, you know the anxiety that comes with finding a home at a fair rent. Landlords everywhere, throughout history, have often taken advantage of the booms in the market to extract top dollar for their rentals. I know it’s not fair. I know it will not change. So what can we do about it?

Since starting in the real estate business at age 23, I’ve witnessed more than half a dozen recessions. In fact, it’s the ups and downs of the real estate market that sent me spinning and brought me to become a mindfulness practitioner and teacher.

Boom and Bust

As with every aspect of life, everything ebbs and flows. In cities like San Francisco, there will always be industries that support higher rents. But many of us remember the dotcom bust of the early 2000s when landlords were underwater, having bought their properties when the market was up and sitting empty for months on end. As a property owner, I must keep in mind that while my costs stay relatively consistent, the income they produce is ever changing.

Right now the money is flowing, creating a delirium in the housing market. Tech money is driving the working class out of neighborhoods. As an artist and a mindfulness teacher, it pains me to see the soul of the city eradicated by high tech companies. But these are not nameless, faceless – nor heartless – people who are coming in droves to work at these high paying jobs. I know because they make up 60% of my tenants. And these young people are giving San Francisco a boost in revenue, while also creating a new Renaissance in dining, art, theatre, and sports.

So since there is no ‘right or wrong,’ ‘good and bad’ players in this situation, we landlords need to ask ourselves how can we navigate through this latest boom in a conscious and still profitable way?

Landlord keysFor me, it’s been a marathon to get to where I am as a landlord who can offer affordable housing while still making a decent profit. Some of the properties I purchased early in my career have less debt than others, and so as rents have steadily increased, I find myself in a positive cash flow situation. With deep gratitude to my tenants, vendors, and financial team, this money then supports me and my family. This allows me to support others to achieve financial and spiritual wealth through my work as a teacher, author and workshop leader, as well as to volunteer, helping inmates practice money and mindfulness.

In my next post, I’ll share a few things I’ve learned in 30 years in San Francisco rental market. Whether you are a renter or a landlord, I think you’ll find it interesting and hopefully helpful.

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