Kristin, Other/Just Looking in San Francisco, CA

How is resale value impacted by a block that has several single family home rentals?

Asked by Kristin, San Francisco, CA Tue Sep 4, 2007

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If you drive down the street and the yards and property is well manicured and maintained there should be no effect. However, if the property is over grown and neglected it will have an impact on value. Bottom line it depends how well the properties are cared for.
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Pam Winterba…, Real Estate Pro in San Ramon, CA
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Kristin- One thing that I didn't notice addressed in the other posts: if there are too many properties that are not owner occupied in an area it may affect an investor buying. It can impact their loans- if it is a detached condo unit, as there has to be a certain amount of owner occupied in the development. Also, if there are too many rental units they may have trouble getting the rents they need, as other landlords may take a lower rent to keep their units rented. Just one bit of caution to be aware of.

Patti Phillips
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0 votes Thank Flag Link Tue Sep 4, 2007
Kristin,
It would really depend on how well the homes were kept up. Any resale is affected by ratty houses close by. It also slides on the scale of how many homes on the block are in disrepair and proximity to the property to be sold.

Let me know if I can be of any further assistance.
Jed
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Jed Lane; Fog…, Real Estate Pro in San Francisco, CA
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It would seem to me that San Francisco might have a higher rental rate period regardless. Non-owner occupied (rentals) are high in the City. Possibly a reason they have rental control laws in place too. If you are targeting SF, this is the reality of the market there. There is always the risk of the next tenant not being "so dreamy." Resale is indeed impacted by poorly kept and undesirable nearby properties for certain. But it is hit and miss. Some owners have yard services that keep the houses automatically in good condition. Cars on the lawn or blocking the street — call the police. Like Patrick said, pick a desirable area … and then hope for the best. Have an agent or someone pull up the rental to ownership ratio in your specific neighborhood you are targeting, or name it here on Trulia in a response and hopefully a SF savvy agent will chirp in.

I posted an article below for you to read on tenants in the City.
0 votes Thank Flag Link Tue Sep 4, 2007
Steve Ostrom, Real Estate Pro in Roseville, CA
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I think the answer to your question depends on whether the rental properties appear well maintained and if there are any problems associated with the tenants. You can call the police department and ask if they have received any calls about the homes that are tenant occupied. I don't think that tenant occupancy per se means lower value. When you think about resale, you never know what the occupancy mix is when you are ready sell. My suggestion is that you learn more about the overall market trend in the neighborhood that you buying. Has the neighborhood been stable, improved or gotten worse over the past 3-5 years? This will tell you more about how your resale value may be affected than focusing on a block with a several rentals. Good luck.
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Ute Ferdig -…, Real Estate Pro in Newcastle, CA
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Hey K
It depends on your location, In Arizona, it is said that over 45% of the homes in Tempe are rentals because of ASU. Tempe is one of our stronger markets right now. However in Maricopa we have a ton of rentals and it is not very pretty out there. How is your Neighborhood? Do you have a good Location?
If it`s a popular neighborhood rentals wont matter.
Later Gator
0 votes Thank Flag Link Tue Sep 4, 2007
Mr.P, Other/Just Looking in Arizona
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