Dear San Francisco Landlords,
In a city where both charm and challenges are abundant, owning and managing property requires more than quick fixes and market savvy—it demands smart, long-term budgeting.
Whether you own a 3-unit Edwardian or a 20-unit building in the Mission, budgeting is the difference between being prepared and being blindsided.
When budgeting, there are several components to consider.
Long Term Tenant Turnover vs. Many Frequent Turnovers
Let’s face it, when a tenant of 30 years moves out, it’s not just a cleaning bill and a coat of paint. You’re likely looking at a full refresh: new flooring, updated cabinets, fresh paint, upgraded appliances. If you haven’t budgeted for it, this can feel like a financial punch in the gut.
But imagine the same unit with ten tenants over that 30-year span. The refreshes would have happened incrementally–small expenses spread out over time. You likely would have paid cumulatively more over those 30 years than with one major remodel, but since the expenses came in smaller increments over time, you wouldn’t be surprised by the costs. Manage your expectations by forecasting and budgeting for these more extensive turnovers over time.
The Lifespan of Your Building’s Components
Planning starts with understanding when things typically wear out.
Here’s a quick reference guide:
Interior Essentials
- Paint: Every 5 years
- Appliances: 10 years
- Cabinets: 10–15 years
- Flooring: Varies – laminate: 10–30 years, hardwood: refinishing every 10–20
Systems
- Water Heater: 7–10 years (tank); 20+ years (tankless)
- A/C Unit: 10–15 years
- Heat Pump: ~16 years
- Furnace: 15–20 years
Plumbing:
- Copper: 50-100 years
- Galvanized Steel: 20-50 years
- Cast Iron: 50-100 years
- Brass: 20-50 years
Exterior & Structure
- Siding: 20-40 years
- Roofing: ~30 years
Windows:
- Wood: 15–30 years
- Vinyl: 20-40 years
- Fiberglass: 30-50 years
If you don’t have a line item in your monthly budget amortizing these costs overtime, you are artificially inflating your profits. If you don’t want to have a line item for each item, a good rule of thumb is to save 10% of your total monthly rents, and place them in savings account for future expenses. Remember you can’t control when these systems fail and need immediate replacement. Plan and save now, so even in a down market, you have cash on hand for these upgrades, so you aren’t caught having to scramble for funds, or refinance.
A Newly Purchased Building with Deferred Maintenance
You might think: “I just bought this building—I’ll plan upgrades later.” Not so fast.
If you’ve purchased a 100-year-old Victorian, your budgeting timeline doesn’t start from zero. Unless the previous owner immaculately maintained the building, you’re inheriting wear and tear. That gorgeous vintage window trim may need replacement now—not in 10 years.
But here’s the upside: budgeting today gives you confidence for tomorrow. Replace the windows now, and it could be 30 years before you need to touch them again. That’s peace of mind and future savings.
Budget Once, Reap the Benefits for Decades
Some line items in your budget are one-time hits for the long haul—like a roof or plumbing upgrade. Others are recurring, like paint or appliances. But the bottom line is: every item is a ticking clock.
When you budget intentionally:
- You avoid financial surprises.
- You manage tenant expectations with confidence.
- You maintain property value—and tenant satisfaction.
Final Thought: Budgeting is Just Good Business
In the ever-evolving San Francisco rental landscape, proactive budgeting isn’t just a strategy—it’s survival.
Set realistic timelines. Allocate reserves. Plan for both the expected and the inevitable. Your future self (and your future tenants) will thank you.
That’s the power of budgeting: you control expectations and reduce financial shocks.