I'm in the bay area. Right near sf
Apartment care is extremely common here. Why because as you may already know everything is over the top compact. No yards no garages and etc.

The state will allow you to have a dc in an apt. However the landlord can charge you a higher deposit as well as lower your # of children. Honestly I don't see how a DC could even cover the cost of a separate rent payment. SF is one of the most expensive places in the US to live.

A 512 sq ft apt goes for about 1250-2500 depending on the area.
I would check into apts first and check to make sure it would even be a profit in it for you.

Also call marin county LIC and ask these questions.

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