San Diegans bracing themselves for rent increases could be in for an even bigger shock - their landlord telling them to buy the apartment, or move out.
Brent Bernau is getting ready to retire during a time he calls uncertain.
“We have no idea what's going to be happening in the future, with health insurance,” he said.
One thing Bernau is certain about is how the San Diego housing market is heating up.
“Summer’s coming, which is a good time to sell, so I hope we can accomplish this,” he said.
He hopes to accomplish an unorthodox move that could be a sign of things to come in this quaint Ocean Beach neighborhood.
Bernau owns this duplex on Point Loma Avenue. He lives in the front house and rents out the back house. He hopes to turn it into a two-unit condo complex - and he's giving his renter 90 days to buy the house, or move out.
It's not just happening in areas filled with duplexes like these, it's also happening in bigger complexes like Deca in Hillcrest. Those used to be apartments. Now, they're condos
Marketpointe Realty Advisors say with San Diego home prices increasingly out of reach, landlords are now considering converting their apartments into condos.
Conversions made up about 40% of the market in 2006 but practically disappeared after the recession.
“When the market starts to really heat up and value starts to increase, a lot of apartment owners start seeing the market opportunities for conversions, because they’re not saddled with a lot of the new development fees in place,” said Russ Valone, of Marketpoint Realty Advisors
Conversions are happening or pending now in Pacific Beach, Hillcrest, and Ocean Beach.
“I would be more concerned with apartment buildings getting turned into condos because that affects a lot more tenants than a single family home that somebody's renting,” Bernau said.
Bernau’s tenant said he is not going to buy the unit. But, he said he was given plenty of notice to start looking for a new place.
Bernau’s neighbors are now learning about his plan.
“Actually a couple of them expressed interest in the process," he said. "Because they're also getting to the age where they'd welcome having a safety net of the cash."
They neighbors are with Bernau, say goodbye to the renter, and hello to a lump sum of cash.