A classic Edwardian home in San Francisco‘s Russian Hill with timeless character has been snapped up for $488,000 by a savvy homebuyer.
The unusually low price is far less than half of the city’s $1.2 million median list price and an even smaller portion of the property’s estimated $1.4 million value.
Though the home might seem like a dream bargain at first glance, it comes with a rather astonishing catch: The new owner may not move into the property for the next 30 years.
According to the listing, the property is currently tenant-occupied under San Francisco’s tenant protection laws, and the current lucky occupant, who pays an incredibly low monthly rent of $417, signed a lease that locked in strict rent controls and grants occupancy rights extending until 2053.
These laws are designed to protect long-term renters, securing low costs over a years long period and enabling the current tenant to take full control over payments of all utilities, including water, garbage, and energy bills.
There’s no wiggle room either. The sale was strictly as is, according to the listing, which also noted that agents were unable to guarantee access to the property for an inspection or even a walk-through before purchase.
The seller also had the right to reject or counter any offers.
Perhaps understandably, given the legal complexities that come with the home, any potential buyers were urged to review the full disclosure package and consult with an attorney before committing to purchasing the house.
And that’s not the only “catch” to have come with the property.
Per the listing, the former male owner of the house died inside it. He was over the age of 100 and died of natural causes.
When the home was first listed, it sparked a frenzy of excitement and intrigue.
One neighbor at the time, Ilia Smith, told ABC News that there was a line of people wrapped around the block waiting for a chance to peek inside the unique home.
“My husband came in and said, ‘You’ve got to look out the window. There’s a line from the house all the way to the middle of the block,’” she said.
Ultimately, it was revealed that the home had been the subject of a bitter family feud, according to the San Francisco Standard, which reported that the home was listed by Todd Lee, who is the son of the current tenant, Sandra Lee.
According to the Standard, the property was purchased by Sandra’s parents, Florence and Kenneth Goo, in the 1970s. The Goos lived there for many years until they both died in the home, in 2006 and 2018, respectively.
Sandra, who has been living in the home since 2018, told the Standard that the property had been listed by her son without her permission. He was unaware of the iron-clad lease clauses that Kenneth had secretly written into her rental agreement before his death, she added.
“If it wasn’t for the lease that [my son] didn’t know about that was made in 2018, I don’t know where we’d be,” she told the publication. “It’s unfathomable, the deception, the betrayal—this is my son doing this to me.”
Property records indicate that the home was actually purchased by Sandra’s daughter, Cheryl Lee, suggesting that the family rift has since been put aside and that the new owner will not have to worry about dealing with the difficulties of having a stranger occupying their home for the next three decades.
At the time of the home’s original listing, experts at local company Kinoko Real Estate explained the complexities of buying this kind of property. There are a few upsides to purchasing a dwelling that already has a long-term tenant installed, they noted.
“Real estate investors might be intrigued by the long-term investment opportunity,” the company’s website said. “The guaranteed rental income for nearly three decades is attractive, especially considering San Francisco’s historically rising rents.”
However, according to Kinoko, the downsides are much more obvious.
“While the long-term rental income might be enticing, there are some significant drawbacks to consider,” the website goes on. “Firstly, the buyer has no control over the property for nearly three decades. Major repairs or renovations would be at the mercy of the tenant’s cooperation.
“Additionally, predicting the housing market in 2053 is a fool’s errand. There’s no guarantee the property will appreciate in value as much as hoped, especially considering the long wait time.”