Single family home or duplex?

[Katrina Razavi]

Hi BP Community! We recently bought a home in the city of SF that is an SFR w/ an illegal in-law downstairs. We're planning on renovating the downstairs. The question is whether we should turn it into a duplex (which is allowable thanks to the zoning) or keep it as a big SFR with a nice downstairs.

We're leaning towards SFR + Airnbnb'ing the downstairs area given we could cash flow more money via Airbnb rather than renting it long-term. I think there's also better resale value in the future as an SFR vs. duplex. The good thing about SFR's is that they aren't rent-controlled. The only reason for the duplex IMO is that if we leave SF we can rent out both units which is probably easier than renting an SFR w/c is more expensive. But thinking that w/ an SFR a group of people could live there and split the rent amongst themselves which is popular in SF.

Curious to hear if anyone has had to make this decision and/or what I should be thinking about as I make it.

Thank you!

[Sean Walton]

Hi Katrina double check all of this but my understanding of the airbnb law is that if it is a room in your house that you rent out there is no cap on the number of days you can have guests (hosted stay). If you legalize the in law or make the in law a 2nd unit then you would be capped at 90 days per year unless you rent for stays of 30 days or more. I think previously you said the in law is vacant but if there is or was an eviction be careful because the former tenant could have rights to return to the unit after renovation. 

As to what the best course of action is, it depends on how long you plan to stay there. I think keeping it as a "room in your house" to airbnb would be most profitable but the most work. You can set 4, 7 or 30 day minimums to reduce time spent on turnover. Or just set your cleaning fee higher to incentivize longer stays or cover all the cost of hiring somone to handle turnover. I would think a legal duplex would lead to higher resale down the road but it is unlikely your zoning will change to SFR in the future so you can always do that work before you sell.

Hope you can make it to the meetup I made on Monday the 19th at Louie's bar https://www.biggerpockets.com/forums/521/topics/45...