With Anthropic’s S-1 now filed with the SEC, over 5,000 staff are about to turn into extraordinarily rich. We’re speaking in regards to the median worker making $3 million to $10 million inside three years, and certain not less than a thousand folks making effectively into eight figures or extra.
The numbers behind it are astounding. The submitting exhibits $16.3 billion in income for the primary half of 2026, up from about $1.2 billion a yr 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 lift $80+ billion extra in its IPO. Fairly darn spectacular.
For workers, making that a lot cash in so little time is like profitable the lottery. They picked the proper ship, and loads of gifted folks tried and couldn’t get on. With correct monetary administration, they and their youngsters needs to be set for all times.
Profiting From AI As An Outsider
For the remainder of us commoners, luck is tougher to come back by.
We are able to purchase actual property within the cities the place AI corporations are headquartered and hope the wealth trickles into house costs and rents. We are able to put money into personal and public enterprise capital and hope the overall companions choose the proper corporations. However even then, our publicity received’t come near that of early AI staff who received fairness as a part of their paycheck.
As an unemployed dad with two younger children, 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 quicker than anticipated.
So I’ve been combing by means of each revenue stream I’ve, searching for methods to earn extra. And one stream stood out: rental property.
The Temptation To Increase Rents Is Actual
San Francisco rents are surging. My tenants are paying about $1,250 a month under what I might seemingly get at present. That’s $15,000 a yr, which might cowl a significant chunk of my subsequent capital name.
Wealthy tenants are rising all over the place in San Francisco proper now. When the folks renting your own home are abruptly value tens of millions, it’s straightforward to suppose: they received’t even discover a couple of hundred additional {dollars} a month. In the meantime, I’d discover it each single month given I am money strapped at 49.
So naturally, I received to questioning. In case your tenants abruptly strike it wealthy, does that change what they owe you? On the very least, ought to they not less than 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 increase to market lease if attainable? 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% yr over yr, with one-bedrooms up 25.4% and two-bedrooms up 26.8% all in line with Zumper. That is the newest lease development of the 100 largest U.S. cities.
Dwelling costs are surging too. The median San Francisco house (consists of condos) bought for about $1.69 million in September, up 14.7% yr over yr, the quickest development 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, once 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 type of expectations is a schedule of rents for the subsequent three years within the lease so each tenants and landlord can finances. The will increase are capped at 3% a yr regardless of not being below lease management.
The schedule is meant to supply readability and rewards tenants for following the lease. If tenants are in good standing, I observe the schedule annually. The longer the tenants keep, the better low cost they get in comparison with market. If not, I’m free to lift the lease inside the regulation with correct written discover.
Each potential tenant has appreciated this readability. And although a landlord normally leaves cash on the desk by elevating lease under market, the peace that outcomes is normally value greater than the additional {dollars}.
Relating to proudly owning bodily actual property as a part of your retirement portfolio, the most important battle is having the persistence to carry for so long as attainable. Proudly owning rental property is a battle of attrition, and my religion in humanity has been examined a pair occasions as a landlord.
Falling Behind Large Time On Market Hire
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. In reality, 2025 was a turbulent yr with three tenant turnovers. That’s life as a landlord. You both promote or discover new tenants, and I’ve discovered a couple of methods on the way to reduce emptiness.
For this property, the earlier tenants have 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 wished the complete five-bedroom, four-bathroom home to themselves. Two house places of work, a health club, and ocean views have been on their want checklist. Sure, all forms of folks spend six figures a yr on lease.
Since then, the rental market has strengthened. I might most probably lease the home for $11,000 to $12,000 a month at present. 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% improve. True to the lease, I adopted the schedule as a result of the tenants have been in good standing.
The price of following the schedule is about $1,250 a month, or $15,000 a yr. And the longer the tenants keep, the larger the chance value for me, however the better the profit for them. So suppose twice earlier than writing a hard and fast lease schedule for brand spanking new tenants. As a substitute of three years, take into account two. And as a substitute of a hard and fast 2.5% improve, take into account a spread for extra flexibility. Both approach, setting expectations up entrance is necessary.
There Is No Cap On Landlord Prices
Hire 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 quicker than inflation.
If a landlord doesn’t cost market lease, revenue margins get squeezed. Mismanage the lease schedule lengthy sufficient and the earnings disappear, which is why some landlords pull their properties off the market altogether. See what’s occurring NYC.
My preliminary considering was that I used to be testing the market in 2025, and I used to be glad with the consequence. So long as lease rises 2.5% a yr, I ought to not less than cowl 80% of the rising value of insurance coverage and primary upkeep.
My tenants are additionally comparatively younger with loads of choices on their facet. I don’t count on them to remain longer than 5 years. Extra realistically, three. With a lot wealth coming their approach, I’d suppose they’d wish to purchase a property ultimately, both in San Francisco or again of their hometown.
Bear in mind, I anticipated my earlier tenants to remain three years, they usually left after 1.2 regardless of having a daughter at school.
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 yr, I’ll rethink whether or not to lift 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 Large 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 yr 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 minimize the lease when that occurs? Not many.
You’ll be able to’t have it each methods. If a tenant’s unhealthy luck doesn’t decrease the lease, their good luck shouldn’t increase it.
A lease is a promise a few home, not a royalty in your tenant’s life. If my tenants make $50,000 or $50 million this yr, the lease schedule stays the identical. That’s the entire level of placing it in writing.
There’s additionally a sensible facet. Tenants who come into cash usually tend to purchase a house than renew. Stress them and chances are you’ll solely velocity 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 yr.
It’s Exhausting To Increase The Hire As A Mother & Pop Landlord
My drawback as a landlord is that I optimize for peace and concord. A property supervisor would seemingly optimize for max revenue. However I’m not about to surrender 1 to 2 months of lease a yr once 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 the way to increase the lease and lengthen a lease with out feeling responsible. Clearly, I’m nonetheless a piece in progress.
That discomfort is the principle 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 large deal.
Honoring The Lease Is The Approach To Go
Despite the fact that the lease goes month-to-month after the primary yr and the schedule isn’t legally binding, honoring my phrase has paid off over 21+ years. Altering the phrases on tenants after a yr is just not the trail to concord, even whether it is my proper to take action.
In case your tenants have precipitated no disturbances, at all times paid on time, been sincere about what they’ve damaged, and paid to repair it, it’s merely not value elevating the lease to market for those who’re nonetheless money move optimistic. Extra concord means longer maintain durations, which is usually higher for constructing wealth.
For income-seeking traders, it is value noting that rental property revenue is superior to dividend inventory revenue. Not like 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, nevertheless it’s nothing like a dollar-for-dollar decline.
A Phrase To Tenants
If rents are surging in your metropolis, observe the lease and provides your landlord zero excuses to lift the lease. To enhance your odds additional, ship a small present every so often. Even a $25 present goes a great distance. It could sound ridiculous, however this type of emotional intelligence can prevent hundreds of {dollars}.
Additionally, the extra self-sufficient you’re at fixing issues and the much less you contact your landlord, the extra seemingly your lease stays cheap. Moreover, who needs to travel 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 abruptly struck it wealthy from an IPO, inheritance, or lottery win, would you increase the lease to market or honor your authentic phrases? Ought to landlords minimize the lease when tenants fall on onerous occasions, in the event that they’d increase it when tenants get wealthy? Do multi-year lease schedules make sense, or are they only 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 method to personal actual property.
Try Fundrise, my favourite personal actual property investing platform. As a substitute of fixing bathrooms or negotiating leases, you’ll be able to 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 hanging it wealthy whilst you honor a three-year lease schedule. 100% passive as a substitute.
I’ve personally invested with Fundrise, they usually’ve been a long-time sponsor of Monetary Samurai.
