Rents have started to drop in San Francisco?  Really?  Prove it.  

Your wish is my command.  

One facet of real estate investing that doesn't get mentioned often enough is appreciation and its driving relationship to property tax and insurance costs. Blub Bierflart may think he's doing great when the neighbor's house sells for nearly twice what the neighbor paid for it, but along with that rapid rise in appreciation come higher insurance premiums and property tax bills. They in turn eat into Blub's cashflow and erode his bottom line unless he sells during the peak and moves to or re-invests in a low-cost location.  

And this . . .  

This is why I'm a fan of the bread and butter SFH. The ones that are bought in the $80,000 to $130,000 range and rent in the $1000 to $1500 range. The swings in prices are nominal. They are always in demand.