Top Landlord Challenges in 2025 (and How to Overcome Them)
Introduction:
Being a landlord in San Francisco has never been a simple job, and 2025 brings its own set of hurdles. From ever-tightening San Francisco rental laws in 2025 to shifts in the rental market, property owners must stay agile. In this post, we’ll explore the top five landlord challenges in San Francisco this year – including rent control, eviction rules, maintenance costs, tenant screening, and vacancies – and provide actionable solutions for each. Whether you’re a seasoned property owner or a new investor, understanding these challenges (and how to overcome them) will help you navigate the city’s complex rental landscape with confidence.
San Francisco’s rent control laws are among the strictest in the nation. In 2025, the allowable rent increase for many rent-controlled units is just 1.4%
– a rate well below recent inflation. (By comparison, the previous year’s cap was 3.6%
, reflecting how limits can fluctuate with the Consumer Price Index.) Moreover, California’s statewide rent cap under the Tenant Protection Act prevents raising rents more than 5% + CPI (max 10%) in a year
on most other units. Local efforts are even considering expanded controls: a 2024 ballot initiative aimed to repeal Costa-Hawkins (the state law that exempts newer buildings and allows vacancy decontrol) and enable stricter San Francisco rental laws
. For landlords, these rules make it challenging to keep up with rising costs or adjust rents to market rates.
How to Overcome It:
Stay Informed & Plan Ahead: Keep up with annual allowable increase announcements and legal updates. For 2025, knowing you can only raise rent ~1.4% on controlled units
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helps you budget early. If your property is exempt from rent control (e.g. newer buildings or single-family homes), be mindful of the state rent cap before planning any rent hike.
Optimize Operating Efficiency: Since you can’t significantly raise rent, focus on reducing expenses. Perform preventative maintenance (to avoid costly repairs later) and consider energy-efficient upgrades that cut utilities. Every dollar saved is a dollar you don’t need to recover via rent.
Leverage Turnovers Wisely: When a unit does turn over, it’s a chance to reset to market rent (vacancy decontrol is still allowed under current law
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). Make strategic improvements to justify a competitive market rent for new tenants. Always ensure any increase or new rent complies with the latest San Francisco rental laws 2025 and disclosure requirements.
Seek Professional Advice: Complex rules like rent control are best navigated with expert help. Engage a local property manager or real estate attorney who knows the ins and outs of San Francisco’s rent ordinance. They can help identify if you qualify for any rent increase petitions (for capital improvements or other expenses) and keep you compliant.
Landlord eviction rules in SF have grown increasingly strict, and 2025 is no exception. San Francisco’s Rent Ordinance requires a just cause for any eviction – meaning you can’t remove a tenant without an approved reason. Even “no-fault” causes (like owner move-in or unit withdrawal) come with stringent conditions. Recent law changes in 2024 tightened these rules further: if you evict to move in yourself, you must occupy the unit within 90 days and stay at least 12 months
; if you evict to perform a major remodel, you must provide detailed work plans and can’t use it as a pretext to simply raise rent
. On top of that, pandemic-era measures and ongoing tenant protections have made actual evictions very rare – only 797 eviction notices were filed in a recent year in San Francisco, a 33% drop from the prior year
. All this means landlords have limited options to remove problem tenants or reclaim their units, and any misstep can lead to legal trouble or penalties.
How to Overcome It:
Know the Law & Document Everything: First, make sure you understand the just causes for eviction in San Francisco (non-payment of rent, lease breach, nuisance, owner move-in, Ellis Act withdrawal, etc.). If you must pursue an eviction, follow every notice requirement to the letter and document any lease violations or legitimate reasons thoroughly. Proper documentation and adherence to process are your best defense if challenged.
Communicate and Seek Win-Win Solutions: Given the difficulty of evictions, it’s often better to work with your tenant. Open communication can resolve many issues – for instance, setting up a payment plan for back rent or addressing complaints to cure a breach. In cases of no-fault evictions (like you need the unit back), consider a cash-for-keys agreement (a voluntary buyout). San Francisco allows negotiated buyouts under specific guidelines – offering relocation assistance in exchange for the tenant vacating. Ensure you follow the city’s buyout ordinance procedures and get any agreement in writing to avoid future disputes.
Get Professional Help Early: Don’t navigate a potential eviction alone. Consult with a landlord-tenant attorney or a local property management firm at the first sign of serious trouble. They can guide you on the legal steps and help you avoid prohibited actions. Remember that unlawful eviction attempts can lead to hefty penalties in San Francisco, so expert advice is vital before you act.
Maintain Good Tenant Relations: An ounce of prevention is worth a pound of cure. By screening carefully (more on that below), setting clear lease expectations, and responding promptly to maintenance issues, you can cultivate a positive landlord-tenant relationship. Satisfied tenants are less likely to create problems or require eviction, meaning fewer headaches for you in the long run.
Owning property in San Francisco is expensive – and the costs keep climbing. From skilled labor to building materials, the Bay Area’s construction and repair costs are among the highest in the country
. Even routine repairs can be pricey, and major projects like roof replacements or seismic retrofits can hit your wallet hard. General inflation in the past couple of years has added to the strain. (For context, U.S. construction costs rose about 4% in 2023 and are projected to rise another 3–6% in 2024, with San Francisco near the upper end at ~4.75%
.) Meanwhile, other operating expenses – property taxes, insurance, utilities, HOA dues – have tended to increase annually. With strict rent control limiting income growth, landlords may feel their maintenance costs outpacing their revenue. Neglecting upkeep isn’t a viable option (for both legal and business reasons), so this squeeze is a real challenge.
How to Overcome It:
Budget and Prioritize Preventative Maintenance: It’s crucial to budget for maintenance as a recurring expense, not an afterthought. Prioritize preventative maintenance – regular servicing of HVAC systems, prompt fixing of minor leaks, annual safety inspections, etc. – to prevent small issues from becoming big, costly repairs. A well-maintained property also keeps tenants happy (and more likely to stay).
Shop Around and Optimize Services: Don’t settle for the first contractor or quote. Given San Francisco’s high costs, it pays to shop around for competitive bids or use vetted vendors through a property management service. Consider service contracts for things like landscaping or pest control, which can lock in better rates. Also, explore city or state programs that offer rebates or incentives for energy efficiency upgrades (e.g., improved insulation, efficient appliances) – these can lower your ongoing utility costs and sometimes come with cost-sharing programs.
Plan for Capital Improvements Strategically: If you need to undertake a major capital improvement (like a retrofit or new roof), plan it strategically. In some cases under rent control, landlords can petition the Rent Board to pass through a portion of capital improvement costs to tenants over time
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(with limits). While you must follow strict rules, this can help recoup some expenses. Even if you don’t pursue a passthrough, timing renovations between tenancies (when a unit is vacant) can allow you to update the unit and potentially set a higher market rent for a new tenant, offsetting the investment.
Consider Professional Property Management: If managing maintenance and contractors is overwhelming, a property management company might save you money in the long run. Many firms have a network of reliable vendors and can often get bulk discounts on repairs. They’ll also handle the 3 a.m. emergency calls and ensure repairs are done correctly – preserving your property’s value and reducing costly mistakes.
Finding a great tenant is always critical, but in San Francisco, tenant screening comes with its own challenges. You want to thoroughly vet applicants (to avoid future non-payment or eviction issues), yet you must navigate numerous laws that protect applicants. For instance, California law caps application screening fees (around $62 per applicant in 2024)
and requires landlords to provide receipts and refund any unused portion. More recently, new regulations have emerged: as of 2025, landlords must process rental applications in the order received and offer the unit to the first qualified applicant before considering others
. If you collect screening fees, you’re required to refund the fee to any applicant not selected within a short time window
. Additionally, discrimination protections are very strict – you cannot deny an applicant based on source of income (Section 8 vouchers are protected by law), and a 2024 update (SB 267) now prohibits using a tenant’s credit history to disqualify a voucher holder without first allowing them to show other proof of ability to pay
. San Francisco also has a “Fair Chance” ordinance limiting use of criminal background information in affordable housing. All these rules mean landlords must be extremely careful and consistent when screening tenants, all while trying to pick a reliable renter who will care for the property and pay on time.
How to Overcome It:
Establish Clear Screening Criteria (and Follow Them): Create a written list of tenant screening criteria – e.g. minimum income-to-rent ratio, acceptable credit score range, rental history requirements – that comply with state and local laws. Publish these criteria to applicants and stick to them for every applicant to avoid any appearance of unfairness. Consistency is key. For example, if your income requirement is 3x the rent, apply it equally to all. (Remember to accommodate lawful sources of income: a voucher plus income should count toward that requirement.)
Use a Step-by-Step Screening Process: Given the new first-come, first-served law, it’s wise to process applications one at a time in the order received. Review the first qualified application thoroughly: run credit and background checks (following legal limits), verify employment and income, and call previous landlord references. This organized approach not only keeps you compliant
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but also ensures you give each applicant due consideration. If the first applicant meets your criteria, you avoid unnecessary delays (and you’ll need to refund other applicants’ fees promptly if you took multiples).
Verify and Document Everything: Don’t rely on gut feeling alone – verify the information applicants provide. Pay stubs, employer contacts, bank statements, and reference letters can all corroborate an applicant’s suitability. Keep notes on what you verified and the outcome for your records. If you reject an applicant, document the legitimate, business-based reason (and provide an adverse action notice if required by law, especially when credit report info influenced the decision). This paper trail protects you in case anyone questions the decision.
Follow Fair Housing Best Practices: Always remember fair housing laws. Avoid interview or application questions that could be interpreted as discriminatory (about family status, religion, etc.), and treat every applicant with the same courtesy and process. If you’re unsure about how to handle certain situations – for example, an applicant with a criminal history or a reasonable accommodation request – consult legal counsel or refer to HUD and SF guidelines. Staying within legal bounds during screening not only shields you from liability but also helps you find tenants in a fair, open way. (For more on this topic, see our tenant screening tips guide for San Francisco landlords.)
During the pandemic and its aftermath, San Francisco saw a significant increase in vacancies as many residents left the city. Remote work trends enabled workers to relocate, and the city’s population dropped notably (over 6% in one year by some estimates
). This decline in population between 2019 and 2022 “significantly affected the demand for apartments,” especially in downtown and luxury segments
. The result: higher vacancy rates and empty units. San Francisco’s apartment vacancy rate hit a pandemic-era peak of about 7.3% in 2021 and has hovered around 7% in recent times – far above the national average (~4.4%)
. In practical terms, many landlords are finding it takes longer to fill units, and they may have to offer concessions to attract renters. High vacancies are also compounded by new housing supply coming onto the market (thousands of new units have been built recently
), giving renters more choices. For landlords, an empty unit means lost income – and in San Francisco, there was even a move to tax long-term vacant units (the “Empty Homes Tax” passed by voters for 2024)
, reflecting pressure to get units occupied. Overall, increasing vacancies and competition for tenants present a serious challenge in 2025.
How to Overcome It:
Price Competitively and Offer Incentives: In a soft rental market, pricing your unit right is crucial. Research current market rents in your neighborhood (look at comparable listings) and be willing to adjust. Slightly lowering the rent to meet the market can reduce vacancy time dramatically – which often benefits you more than holding out for a higher rent and losing months of income. Additionally, consider offering incentives that are common in San Francisco now, such as a free month’s rent, reduced security deposit, or a bonus for signing a longer lease. These perks can make your offering stand out to cost-conscious renters without permanently reducing the rent on the lease.
Improve Marketing and Appeal: With more vacancies, you need to win over choosy renters. Invest in quality marketing: take bright, high-resolution photos, write a compelling listing highlighting the unit’s best features, and list on multiple platforms (Zillow, Apartments.com, local Facebook groups, etc.). Emphasize amenities that today’s renters value – for example, if your unit is suitable for work-from-home, mention a dedicated office nook or high-speed internet availability. Little upgrades can go a long way too: fresh paint, modern light fixtures, or adding an in-unit washer/dryer can significantly boost interest. Don’t forget curb appeal for single-family or small buildings – a clean, inviting exterior gives a great first impression during showings.
Be Flexible with Prospective Tenants: Broaden your pool of potential renters by being flexible where you can. Can you allow pets? Many San Francisco renters have pets, and a pet-friendly policy (with reasonable pet rent or deposit) can set your unit apart. Open to slightly shorter lease terms? Offering a 6-month or month-to-month lease might attract someone new to the city or here on a work project. You might also consider accepting co-signers or guarantors for students or younger renters who otherwise meet your criteria. The easier you make it for a qualified tenant to say “yes,” the faster you’ll get that unit occupied.
Focus on Tenant Retention: Filling vacancies is costly, so preventing them is just as important. Turn your attention to keeping the good tenants you already have. Respond quickly to maintenance requests, be attentive and respectful, and perhaps show appreciation (a holiday card or a small gift on lease renewal can foster goodwill). Happy tenants are more likely to renew their lease, meaning you won’t have to find new renters as often. By improving retention, you can stabilize your occupancy rate even when the broader market is in flux.
Conclusion:
San Francisco’s rental market in 2025 presents challenges that can test any landlord – from legal hurdles like rent control and eviction restrictions to economic pressures like rising costs and vacancies. However, as we’ve outlined, each challenge can be met with proactive and informed strategies. By staying up-to-date on San Francisco rental laws, running your property efficiently, and prioritizing good tenant relations, you can not only overcome these challenges but thrive as a landlord. Remember that you’re not alone: many resources (local landlord associations, property management experts, legal advisors) are available to help navigate the complexities of being a landlord in SF.
In the end, success in property management often comes down to knowledge and flexibility. Keep learning, adapt to the market, and treat your tenants fairly – and you’ll find that even in a tough environment like San Francisco, being a landlord can still be a rewarding investment. What challenges have you faced as a landlord, and what solutions have worked for you? Feel free to share your experiences or ask questions in the comments. By exchanging tips and staying engaged with the community, we can all become better prepared to handle whatever 2025 (and beyond) brings to the San Francisco housing market.
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