It sounds like you got some good answers regarding rent and eviction control. Here's my consolidated list of resources in case they are not all listed below.
As for keeping the home as a rental, I certainly understand how this could be a good option. Depending on your situation, you may be able to cover or come close to the holding costs with the rent. The major ones are: mortgage, property taxes, insurance, up-keep and maintenance.
Unfortunately, due to SF's strict rent and eviction control laws, a tenant-occupied home will be worth less than a vacant one; it will lower the property value. (exception: actual multi-unit income property; then it depends on the tenant profile and rent roll)
In other words, renting your place out may solve the problem in the short term but add more for next year. To maximize the sales price, you'll want to have the tenant move-out and be able to market a vacant home. Unless they do this voluntarily, you may be giving them a hefty moving gift! And, there are no guarantees. Maybe you have a special situation. I don't know so I'm assuming a standard tenancy...
Also, please consider tenant wear and tear. No doubt, the tenant will be "harder" on your home than you would be so more repairs and fix-ups may be necessary to get the highest sales price when you sell.
All in all, there are many factors to consider and yes, I totally agree with consulting a tax and legal advisor.
Many potential sellers are contemplating these questions right now. The media is full of bad news, making it seem like a sale is not possible or that it must be a fire sale. For nice homes in nice locations, this is simply not true! In fact, there are now so many more buyers out shopping than last Fall. I keep hearing of open houses with 100 visitors. This was true in my latest listing too!
Where is your home? Maybe it would be helpful to see recent sales history for your neighborhood if you haven't already. With interest rates this great, many buyers are actually taking the plunge.
My general advice to folks pondering rent v sell is that if you plan to keep the house for 5+ years, I'd say rent it out. If you plan to sell within 5 years, there is a strong argument to sell now.
The market is declining. It may or may not continue to decline into 2010/2011. Regardless, it will be a while before prices start appreciating significantly to make up for price declines etc. A big factor is where do we think interest rates will be next year? If rates go up, that will have a big effect on our market's recovery.
Every situation is different and this is a conversation better suited to offline so we can discuss your particulars. Sometimes, I do recommend holding onto the property and not selling. It all depends on the issues above and others.
My blog has more info on the current market and home selling etc etc. Check it out at: http://sfhotlist.com/blog/index.php
Best of luck with your decisions and I hope this was helpful! I'm available should you want to discuss further. We are all here to help! :)
San Francisco Realtor
danielle (at) sfhotlist.com