Sold for as low as $488,000, well below appraisal

A classic Edwardian home in San Francisco's Russian Hill sold for $488,000, a price that was not just half of San Francisco's median listing price of $1.2 million, but well below the property's $1.4 million appraisal. Behind this seemingly attractive price, however, lie complex legal and practical issues.

The Power of Tenant Protection Laws: New Owners Can't Move in for 30 Years

According to San Francisco's Tenant Protection Law, the house is currently occupied by a tenant at a low rent of $417 per month, with a guaranteed lease until 2053. This means that even if a new buyer pays for the house, they may not be able to actually use the property for up to 30 years.

(Realtor.com)

Not only do tenants benefit from strict rent control, but they also have full access to the home, including paying for utilities such as water, trash and energy. Additionally, the listing information clearly states that the property is being sold as-is, with no way for the buyer to conduct an inspection or site visit prior to purchase.

Former Homeowner's Death and Complicated Family Disputes

The previous owner of this home was reportedly over 100 years old, died of natural causes, and passed away inside the house. When listed for sale, this unique property attracted a large number of onlookers. The family dispute behind the house was even more complicated, with current tenant Sandra Lee stating that her son listed the property for sale without her consent, and that her lease included an ironclad long-term rental clause. Eventually, the property was purchased by Sandra's daughter, Cheryl Lee, and the family feud came to an end.

(Getty Images)

Long-term investment opportunities and risks

Kinoko Real Estate notes that investors who buy such properties may value the long-term rental income, especially as rents continue to rise in San Francisco. However, the risks are equally obvious:

Lack of control over the property: buyers will not be able to renovate or remodel the property for nearly 30 years and will need to rely entirely on the cooperation of tenants.

Market uncertainty: the real estate market in 2053 is unpredictable, and there is no guarantee of property appreciation after decades of waiting.