Ask Us: Can Condo Conversion Save You From Rent Control?
Where readers ask and we (the community) try to answer:
This is a doozy of a question, so put your game faces on:
Being fairly new at the SF real estate/landlording game, I am still discovering the fascinating mine field of Rent Control laws through the numerous websites on the subject.
At least FrontSteps.com somehow manages to make it entertaining. Maybe you can help me with a few beginner questions here.
Here is my situation :
I plan to buy a 2 unit home (both vacant) with a friend as a TIC in SF and subject to Rent Control. After occupying one unit each for a year, we hope to by-pass the lottery and go for condo conversion to own one each. Does this sound like a reasonable plan?
Question 1: During the 2-3 following years needed to complete the conversion, do both of us still need to occupy the units or can we rent one or both?
Question 2: Once converted, is it true that if we rent (to brand new tenants) we will still suffer from Rent Control (because we are the subdivisers) ?
Question 3: If so, why does everybody want to condo-convert? Is it only to make a 10-15% profit by selling the condo just after? Isn’t it to enjoy renting the place free of RC at all?
(I understand that another benefit is to get separate ownerships instead of the TIC).
Question 4: Assuming the answer to 2) is yes, is there any loophole? For instance if I live in my condo and I buy the second condo from my friend, then maybe I can rent this one exempt of RC?
question 5: If I live in the unit and rent 1 room, is it still under Rent Control?
Thanks for your help.
Let’s see what replies we can get from the readers in the comments below, and we’ll fill in the blanks just as soon as we can. It sure would be nice if David Gellman or Andy Sirkin would provide some insight (and maybe win a client as a result).
Thanks for reading and thanks for this lovely little quote, “At least FrontSteps.com somehow manages to make it entertaining.” We aim to please, and entertain, so we have to ask, “Have you nominated your sexiest Realtor today?”