With Anthropic’s S-1 now filed with the SEC, over 5,000 staff are about to change into extraordinarily rich. We’re speaking concerning the median worker making $3 million to $10 million inside three years, and sure a minimum of a thousand individuals making effectively into eight figures or extra.
The numbers behind it are astounding. The submitting reveals $16.3 billion in income for the primary half of 2026, up from about $1.2 billion a 12 months earlier. Since Opus 5.5 launched on September 22, 2026, token utilization for Claude has grown roughly 3.6X. The corporate has over $130 billion in money and investments, is already producing an working revenue, and is about to boost $80+ billion extra in its IPO. Fairly darn spectacular.
For workers, making that a lot cash in so little time is like successful the lottery. They picked the appropriate ship, and loads of gifted individuals tried and couldn’t get on. With correct monetary administration, they and their youngsters must be set for all times.
Profiting From AI As An Outsider
For the remainder of us commoners, luck is tougher to return by.
We will purchase actual property within the cities the place AI corporations are headquartered and hope the wealth trickles into house costs and rents. We will put money into non-public and public enterprise capital and hope the overall companions decide the appropriate corporations. However even then, our publicity received’t come near that of early AI staff who acquired fairness as a part of their paycheck.
As an unemployed dad with two younger youngsters, I fear about falling into the everlasting underclass as AI wealth pulls additional forward. It doesn’t assist that I’m dealing with a liquidity crunch once more, because of enterprise capital calls that got here in a lot sooner than anticipated.
So I’ve been combing by way of each revenue stream I’ve, searching for methods to earn extra. And one stream stood out: rental property.
The Temptation To Elevate Rents Is Actual
San Francisco rents are surging. My tenants are paying about $1,250 a month beneath what I may doubtless get in the present day. That’s $15,000 a 12 months, which might cowl a significant chunk of my subsequent capital name.
Wealthy tenants are rising in every single place in San Francisco proper now. When the individuals renting your own home are instantly value hundreds of thousands, it’s simple to assume: they received’t even discover just a few hundred further {dollars} a month. In the meantime, I’d discover it each single month given I am money strapped at 49.
So naturally, I acquired to questioning. In case your tenants instantly strike it wealthy, does that change what they owe you? On the very least, ought to they a minimum of pay market lease?
Loads of landlords would say sure. Being a landlord is a enterprise, not a charity. If the market is scorching and tenants can afford it, why not elevate to market lease if doable? The reply is just not so simple as I initially thought.
Growth Occasions In San Francisco Housing
After a down interval in 2022 and 2023, the San Francisco housing market is scorching because of the AI increase.
San Francisco now has the strongest housing market within the nation. Citywide rents are up about 27% 12 months over 12 months, with one-bedrooms up 25.4% and two-bedrooms up 26.8% all in keeping with Zumper. That is the most recent lease progress of the 100 largest U.S. cities.
Residence costs are surging too. The median San Francisco house (contains condos) offered for about $1.69 million in September, up 14.7% 12 months over 12 months, the quickest progress of any main market. For single-family homes, the median is up about 24% (~$2.2 million), with 86% promoting over asking.
So any San Francisco landlord who signed a lease in 2025 or earlier is probably going now not charging market lease. Not even shut.
Created A “Schedule Of Rents” In The Lease
I’ve been a San Francisco landlord since 2005, after I rented out the primary property I purchased in 2003. Through the years, I’ve developed harmonious relationships with my tenants because of a lease that units expectations clearly.
A kind of expectations is a schedule of rents for the following three years within the lease so each tenants and landlord can finances. The will increase are capped at 3% a 12 months regardless of not being underneath lease management.
The schedule is meant to supply readability and rewards tenants for following the lease. If tenants are in good standing, I comply with the schedule every year. The longer the tenants keep, the better low cost they get in comparison with market. If not, I’m free to boost the lease throughout the regulation with correct written discover.
Each potential tenant has appreciated this readability. And though a landlord often leaves cash on the desk by elevating lease beneath market, the peace that outcomes is often value greater than the additional {dollars}.
In terms of proudly owning bodily actual property as a part of your retirement portfolio, the largest battle is having the endurance to carry for so long as doable. Proudly owning rental property is a warfare of attrition, and my religion in humanity has been examined a pair instances as a landlord.
Falling Behind Huge Time On Market Lease
In July 2025, my tenants of 1.2 years gave discover. That was disappointing as a result of I believed they’d keep for 3 years. The truth is, 2025 was a turbulent 12 months with three tenant turnovers. That’s life as a landlord. You both promote or discover new tenants, and I’ve discovered just a few methods on methods to reduce emptiness.
For this property, the earlier tenants had been paying $9,200 a month. I made a decision to check the market at $9,995. In three weeks, I discovered nice tenants, a pair with no pets who needed all the five-bedroom, four-bathroom home to themselves. Two house places of work, a gymnasium, and ocean views had been on their want record. Sure, all kinds of individuals spend six figures a 12 months on lease.
Since then, the rental market has strengthened. I may most definitely lease the home for $11,000 to $12,000 a month in the present day. Let’s name it $11,500, to be conservative. However when the one-year anniversary got here on October 1, 2026, the lease solely went as much as $10,250, a 2.5% enhance. True to the lease, I adopted the schedule as a result of the tenants had been in good standing.
The price of following the schedule is about $1,250 a month, or $15,000 a 12 months. And the longer the tenants keep, the larger the chance value for me, however the better the profit for them. So assume twice earlier than writing a hard and fast lease schedule for brand new tenants. As a substitute of three years, contemplate two. And as an alternative of a hard and fast 2.5% enhance, contemplate a variety for extra flexibility. Both means, setting expectations up entrance is vital.
There Is No Cap On Landlord Prices
Lease management is nice for tenants who profit from it. However for landlords, there’s no such factor as value management. Insurance coverage, upkeep, and labor prices are all rising sooner than inflation.
If a landlord doesn’t cost market lease, revenue margins get squeezed. Mismanage the lease schedule lengthy sufficient and the income disappear, which is why some landlords pull their properties off the market altogether. See what’s taking place NYC.
My preliminary considering was that I used to be testing the market in 2025, and I used to be happy with the end result. So long as lease rises 2.5% a 12 months, I ought to a minimum of cowl 80% of the rising value of insurance coverage and fundamental upkeep.
My tenants are additionally comparatively younger with loads of choices on their aspect. I don’t count on them to remain longer than 5 years. Extra realistically, three. With a lot wealth coming their means, I might assume they’d need to purchase a property ultimately, both in San Francisco or again of their hometown.
Keep in mind, I anticipated my earlier tenants to remain three years, and so they left after 1.2 regardless of having a daughter in class.
So on the finish of the day, I’m following the lease I drew up and signed. If my tenants are nonetheless there after their fourth 12 months, I’ll rethink whether or not to boost the lease to market.
Your Tenant’s Monetary Windfall Is Separate
Again to the unique query. Ought to a tenant’s sudden wealth change something?
Tenants strike it wealthy on a regular basis. One buys a lottery ticket on a whim and hits for $20 million. One other’s startup will get acquired by Huge Tech. One other inherits a fortune from a grandparent they visited twice. One other will get promoted to managing director and begins incomes effectively over $1 million a 12 months in a single day.
Now flip it round. Tenants additionally get laid off, undergo divorces, get sick, and watch their portfolios drop 40%. What number of landlords voluntarily reduce the lease when that occurs? Not many.
You possibly can’t have it each methods. If a tenant’s unhealthy luck doesn’t decrease the lease, their good luck shouldn’t elevate it.
A lease is a promise a couple of home, not a royalty in your tenant’s life. If my tenants make $50,000 or $50 million this 12 months, the lease schedule stays the identical. That’s the entire level of placing it in writing.
There’s additionally a sensible aspect. Tenants who come into cash usually tend to purchase a house than renew. Strain them and it’s possible you’ll solely pace up their exit. One vacant month at $10,250 wipes out roughly eight months of my $1,250 low cost.
When good tenants ultimately depart, I’ll reset to market lease. Till then, my phrase is value greater than $15,000 a 12 months.
It’s Laborious To Elevate The Lease As A Mother & Pop Landlord
My drawback as a landlord is that I optimize for peace and concord. A property supervisor would doubtless optimize for max revenue. However I’m not about to surrender 1 to 2 months of lease a 12 months after I don’t have a day job and have been managing properties since 2005.
Regardless of my expertise, I nonetheless discover elevating the lease deeply uncomfortable. I’ve written about methods to elevate the lease and lengthen a lease with out feeling responsible. Clearly, I’m nonetheless a piece in progress.
That discomfort is the primary cause I hand over a three-year lease schedule up entrance to keep away from any future awkwardness. When a brand new tenant’s enthusiasm is highest, they see the phrases. In the event that they agree, they signal with no surprises. If not, no massive deal.
Honoring The Lease Is The Method To Go
Although the lease goes month-to-month after the primary 12 months and the schedule isn’t legally binding, honoring my phrase has paid off over 21+ years. Altering the phrases on tenants after a 12 months is just not the trail to concord, even whether it is my proper to take action.
In case your tenants have induced no disturbances, at all times paid on time, been trustworthy about what they’ve damaged, and paid to repair it, it’s merely not value elevating the lease to market if you happen to’re nonetheless money movement optimistic. Extra concord means longer maintain intervals, which is usually higher for constructing wealth.
For income-seeking buyers, it is value noting that rental property revenue is superior to dividend inventory revenue. In contrast to an organization that pays a dividend, when a home pays you lease each month, its worth doesn’t drop by a commensurate quantity. Put on and tear is actual, however it’s nothing like a dollar-for-dollar decline.
A Phrase To Tenants
If rents are surging in your metropolis, comply with the lease and provides your landlord zero excuses to boost the lease. To enhance your odds additional, ship a small present every now and then. Even a $25 present goes a good distance. It could sound ridiculous, however this type of emotional intelligence can prevent 1000’s of {dollars}.
Additionally, the extra self-sufficient you might be at fixing issues and the much less you contact your landlord, the extra doubtless your lease stays affordable. Moreover, who desires to trip with a landlord anyway?
Simply know this leeway largely exists with mom-and-pop landlords. A company landlord’s pricing software program doesn’t care about your present. A human landlord with a conscience would possibly.
Readers, in case your tenants instantly struck it wealthy from an IPO, inheritance, or lottery win, would you elevate the lease to market or honor your authentic phrases? Ought to landlords reduce the lease when tenants fall on arduous instances, in the event that they’d elevate it when tenants get wealthy? Do multi-year lease schedules make sense, or are they simply leaving cash on the desk? And tenants, would you ship your landlord a $25 present to maintain your lease down, or would that really feel like a bribe?
Make investments In Actual Property With out The Tenant Drama
If this publish made you understand being a landlord means leaving cash on the desk, consuming rising prices, and agonizing over lease will increase, there’s one other option to personal actual property.
Take a look at Fundrise, my favourite non-public actual property investing platform. As a substitute of fixing bogs or negotiating leases, you may put money into a diversified portfolio of residential and industrial actual property, beginning with as little as $10.
No midnight calls about leaky taps or awkward lease conversations. No tenants putting it wealthy when you honor a three-year lease schedule. 100% passive as an alternative.
I’ve personally invested with Fundrise, and so they’ve been a long-time sponsor of Monetary Samurai.
