Sailing Landlords

[Steve_C]

I have only 3 tenants in Southeast Texas, 2 residential and 1 commercial. All are in good shape and paying on time.

I intentionally picked an area that has really strong growth and employment, and a shortage of good rental property. I also was also very lucky that my tenants are not employed in an industry that is so affected by social distancing. This "luck" is something to keep in mind if I find a need to replace a tenant. I do keep the properties in really good condition, and charge just under market rate. All of my tenants are really keen not to have to find something new.

There is a lot to said for keeping these relationships with "Aligned Self Interest". That's worth a lot more than trying to squeeze every dollar I can out of a tenant.

[stevensuf]

In the Uk , so far this month 4 out of 7 have paid 2 defaulted , one not due for another week.


The UK government has made it impossible to evict fr 6 months, and you add on another 3 months for the paperwork, so at least 9 months to get them out.


It annoys me as i know one of the defaulters is on benefits from the government, so is choosing to not pay and keep the government housing benefit.


Such a stupid system, before government rent cheques were paid direct to the landlords, but in some stupid EU law, they declared it degrading so paid it to the tenant who then had to pay it to the landlord, of course it is now open to abuse, where before the rent was guaranteed.

[Nucopia]

I have 1 vacancy, which I am leaving vacant until after the crisis.
My other properties are paid and up to date ..2 tenants are on government benefits so also receive rental assistance and since the crisis have received a 750 stimulus payment. their income has increased not decreased so there is no valid reason for them to default on paying their rent. What I have found, is that it is the Greens party here in Australia that are pushing this situation.
The financial situation for renters on government payments has not changed at all because of the crisis and those who have lost their job because of the crisis can apply for and receive emergency funding and an increase in unemployment payments over and above what was paid before the crisis.. I think any tenant that defaults on their rent feels they have justification because of the Greens political parties (socialist/communists) campaign to protect them..which to me is a farce and a political stratergy to destabilise the private housing system during the crisis..

[Nucopia]

The other thing that annoys me is this, every one not working is supposed to be staying home. If you lost your job you get government benefits at twice the normal rate, if you never had a job your payment has increased ,on a pension you get the same amount plus a $750 bonus..if you are staying at home you logically are spending a lot less than if you were working ..less travel costs less spent on impulse buying less on buying lunch and snacks .. people should be saving money ...paying rent should be the same as paying for any goods or service .. no one can buy fuel and then cry poor and not pay , they can’t buy groceries and demand the store gives it to them for nothing.. I understand tenants should have security in this crisis but so should the landlord ..the greens however see the landlord as the villain taking advantage of an oppressed victimised tenant.. and have exploited the crisis to destabilise the private housing system..

[Fence Man]

Originally Posted by Hermes

How are your rentals holding up? Obliviously a tough time...hearing non-payments are up to 50% or higher in some markets and a hold on evictions.

We are still 100% residential, and 100% on time again this month. The majority of our units are one bedroom, and occupied by either retired folks, or section 8 tenants. We've maintained a 5-8% vacancy rate, and will be at 100% occupancy if we get the lease signed this evening that is on the schedule. We have been working on our black swan preparedness the past couple years, which includes some units that are off the beaten path and fit the budget of most fixed income customers. I had been figuring on an economic stumble, but assumed it'd be an election, not a virus. Oh, wait a minute. You don't think there could be a connection, do you?

[Nucopia]

Originally Posted by Fence Man

We are still 100% residential, and 100% on time again this month. The majority of our units are one bedroom, and occupied by either retired folks, or section 8 tenants. We've maintained a 5-8% vacancy rate, and will be at 100% occupancy if we get the lease signed this evening that is on the schedule. We have been working on our black swan preparedness the past couple years, which includes some units that are off the beaten path and fit the budget of most fixed income customers. I had been figuring on an economic stumble, but assumed it'd be an election, not a virus. Oh, wait a minute. You don't think there could be a connection, do you?

All that’s wrong with society are taking advantage of this crisis to push their agenda... socialist are loving this crisis ..

[Boatguy30]

What's wrong? Section 8 tenants or section 8 landlords?

I looked at a few properties with section 8, didn't buy them. I prefer single family as you can eventually sell them with a private mortgage. Use as your legal address for 2 years before you sell and it's the gift that keeps on giving. Purchasers are happy also, assuming you give them a fair deal. Just sold one in Jan @ 7%. 10 yr balloon

[arsenelupiga]

there is something called DIVERSIFICATION.

Have look in some books do gogle search.

Looks like everyone here is 100 % in property.

You need to be up to 1/3 in property, no more else risking quick crash landing.

[Nucopia]

Originally Posted by arsenelupiga

there is something called DIVERSIFICATION.

Have look in some books do gogle search.

Looks like everyone here is 100 % in property.

You need to be up to 1/3 in property, no more else risking quick crash landing.

I also have a share portfolio an annuity and precious metals - Gold Silver bullion, but your right diversification is a smart stratergy ...

[belizesailor]

Originally Posted by Chotu

https://nypost.com/2020/04/09/more-t...o-coronavirus/

Highlights - get ready sailing landlords. Maybe you can get proactive somehow.

The National Multifamily Housing Council tracked data from 13.4 million apartment units and found that 31 percent of renters had not paid their rent in the first week of April, up from 19 percent for the same period in the previous month, according to a report released this week.

“The COVID-19 outbreak has resulted in significant health and financial challenges for apartment residents and multifamily owners, operators and employees in communities across the country,” said Doug Bibby, the president of the National Multifamily Housing Council.

Almost half (46 percent) of renters say they have less than $500 in emergency funds, while 22 percent of homeowners say they don’t have enough saved to cover their mortgage payment for a month, according to a separate poll of 1,000 renters and homeowners from Clever, an online service connecting house hunters with real-estate agents

Yes, Americans are notoriously poor savers and most have high debt too. For most a disruption of income is a financial catastrophy with a very short runway. This characterizes the majority of Americans.

I expect this combination of factors is going to have a massive negative impact on the USA ecomomy and financial devastation for many Americans.

[belizesailor]

Originally Posted by Fence Man

We are still 100% residential, and 100% on time again this month. The majority of our units are one bedroom, and occupied by either retired folks, or section 8 tenants. We've maintained a 5-8% vacancy rate, and will be at 100% occupancy if we get the lease signed this evening that is on the schedule. We have been working on our black swan preparedness the past couple years, which includes some units that are off the beaten path and fit the budget of most fixed income customers. I had been figuring on an economic stumble, but assumed it'd be an election, not a virus. Oh, wait a minute. You don't think there could be a connection, do you? [emoji3]

[emoji106]

Glad to read thats still working out for you!

[Fence Man]

Originally Posted by belizesailor

[emoji106]

Glad to read thats still working out for you!

Thanks! We've had trouble finding anything locally that was a good value in the last 18 months. We have a small farm down the road from home, and have been working the numbers over on a couple of "bulletproof" duplexes. It's a paved road, on city utilities with the exception of sewer, and less than 10 minutes from town in either direction. Do you see any added value for a renter to have "country living" with the convenience of cheap power and gas? I'm thinking barndominium style on a slab.
We also purchased a three bedroom in St. Augustine, FL which is mainly to fulfil my wife's dream of having a house there, but it's conveniently located straight across the ICW from our boat. We have considered renting it short term to people that we have some sort of relationship with....Folks local to us in Indiana going on vacation, cruisers with a boat in the yard, good customers, potential customers, or vendors? Do you have any silver bullet for a bit of income without giving up accessibility? We plan on using it mostly in the winter, and a bit of a home base for some Bahamas boat trips. We aren't dependent on any income from this one, but I wouldn't turn money down! Hope all is well.

[dougweibel]

Now is not the time to be looking for a new investment property. Patience! Remember that real estate prices lag.

Consider your opportunity costs. We don't know how deep this recession/depression will be. If it is as hoped a quick event with a V shape and you wait then you may be investing at prices similar to what you would have paid 4 months ago. You may miss out on a 5-20% price advantage but if this is a short event and things return to normal you will still be in a good place.

However if it is deep and long and you invest now you will have bought in too soon on the way down. You may be suffering with a low cap rate, possible cash flow issues, no ability to bail out, etc. for a number of years. On the other hand if you wait to see the real bottom you might be investing at a 30 to 60% discount, in which case you will be correctly positioned during the downturn and will see both large appreciation and high cap rates when things recover.

[belizesailor]

Originally Posted by Fence Man

Thanks! We've had trouble finding anything locally that was a good value in the last 18 months. We have a small farm down the road from home, and have been working the numbers over on a couple of "bulletproof" duplexes. It's a paved road, on city utilities with the exception of sewer, and less than 10 minutes from town in either direction. Do you see any added value for a renter to have "country living" with the convenience of cheap power and gas? I'm thinking barndominium style on a slab.

.....

Depending on the local market, yes. Some partners and I bought some very well positioned land in the country just as a buy and hold. It had some mobile homes, metal buildings, etc on it that were not even factored into the purchase price. We fixed them up, added some fencing, and now rent them to horse people. For a minimal additional investment they are now producing solid revenue.

However, I would be very cautious about any new investments now. I think this is going to get way worse economically, like Great Depression worse. It would be very good to be sitting on a nice pile of cash as the recovery begins (years down the road I think). We shall see...

[Fence Man]

Originally Posted by belizesailor

Depending on the local market, yes. Some partners and I bought some very well positioned land in the country just as a buy and hold. It had some mobile homes, metal buildings, etc on it that were not even factored into the purchase price. We fixed them up, added some fencing, and now rent them to horse people. For a minimal additional investment they are now producing solid revenue.

However, I would be very cautious about any new investments now. I think this is going to get way worse economically, like Great Depression worse. It would be very good to be sitting on a nice pile of cash as the recovery begins (years down the road I think). We shall see...

I had considered making a few of them horse friendly, and we are in the agricultural fence business....
I hope you are wrong about the economy, but fear you are right. Time to start stacking cash!